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SMM Base Metals Market Daily Review (2014-4-24)
Apr 25,2014 10:00CST
price review forecast
The most active SHFE copper contract price started Wednesday's night session at RMB 46,660/mt, swinging by only RMB 100/mt.

SHANGHAI, Apr. 25 (SMM)--

The most active SHFE copper contract price started Wednesday's night session at RMB 46,660/mt, swinging by only RMB 100/mt, and subsequently tracked LME lead prices up to close RMB 130/mt higher at RMB 46,760/mt. Traded volumes hovered around 100,000 lots, while positions remained essentially unchanged. On Thursday, SHFE copper prices rallied above the RMB 47,000/mt mark, helped by LME copper prices, and later advanced further to a high of RMB 47,330/mt before ending up RMB 620/mt, or 1.33%, at RMB 47,250/mt. Traded volumes and positions for the most active SHFE copper contract soared 80,118 lots and 13,916 lots, respectively. Totaled traded volumes added 142,000 lots, but total positions shed 3,088 lots.

In the Shanghai physical market, copper was offered Thursday at a premium of RMB 540-680/mt over the nearby SHFE contract. Traded prices were RMB 48,250-48,400/mt for standard-quality copper and RMB 48,300-48,500/mt for high-quality copper. As SHFE copper prices staged a sharp rebound, cargo holders turned disinclined to move goods in an attempt to push up physical premiums, resulting in a shortage of copper supply. Rising premiums along with SHFE copper prices gave some middlemen incentives to purchase goods, but downstream producers bought goods only on an as-needed basis. As SHFE copper prices extended gains during the afternoon trading session, some middlemen and downstream producers entered the market to purchase copper. Declining supply pushed up physical premiums to RMB 600-720/mt, with traded prices rising to the RMB 48,500-48,700/mt range.
On Wednesday night, SHFE 1407 aluminum contract crept higher to RMB 13,610/mt after starting at RMB 13,430/mt, and finished the night session at RMB 13,550/mt. Trading volumes totaled 29,812 lots, and positions added 4,904 lots to 121,700 lots. On Thursday, the most active contract extended gains, touching a session high of RMB 13,725/mt before closing up RMB 265/mt or 1.97% at RMB 13,695/mt. Trading volumes soared to 70,948 lots, but positions decreased 178 lots to 121,522 lots. 

Spot aluminum largely traded at RMB 13,350-13,400/mt in Shanghai, RMB 13,360-13,420/mt in Wuxi, and RMB 13,370-13,430/mt in Hangzhou on Thursday. SHFE 1405 aluminum contract gained around RMB 250/mt, encouraging sellers in physical markets to raise offers sharply as well. Rising prices fuelled buying interest of traders. In the afternoon, high offers left trading muted.

SHFE 1407 zinc contract prices opened at RMB 15,125/mt on Wednesday evening. As some longs left the market with profit-taking, SHFE 1407 zinc contract prices hovered around opening prices and closed at RMB 15,115/mt, down RMB 50/mt or 0.33%. Trading volumes increased by 1,406 lots to 11,800 lots, and total positions increased by 606 lots to 80,162 lots. SHFE 1407 zinc contract prices opened at RMB 15,125/mt on Thursday, gaining ground after hovering around the opening price, supported by rising LME zinc prices. At the end of trading, SHFE 1407 zinc contract prices touched an intraday high of RMB 15,200/mt, and closing at RMB 15,195/mt, up RMB 30/mt or 0.2%. Trading volumes increased by 1,194 lots, to 26,522 lots, and total positions increased by 7,084 lots, to 87,246 lots.

#0 zinc prices were between RMB 15,140-15,170/mt, with spot premiums of RMB 0-30/mt against SHFE 1407 zinc contract prices. #1 zinc prices were between RMB 15,120-15,130/mt. SHFE 1407 zinc contract prices hovered around RMB 15,130/mt during the first trading session on Thursday, with spot premiums expanding to RMB 30/mt. Shuangyan branded #0 zinc prices were around RMB 15,160/mt, with RMB 15,150/mt for Yuguang branded #0 zinc and RMB 15,140-15,150/mt for other regular brands. During the second trading session, SHFE zinc prices edged up to RMB 15160/mt, and spot transactions made at the low end of the price range decreased. But high spot premiums stimulated buying interest of downstream buyers and traders. Spot price gains were limited. Shuangyan branded #0 zinc was once quoted between RMB 15,170-15,180/mt, but mainstream prices were around RMB 15,160/mt. Prices for Jiulong, Qinxin and Yuguang were around RMB 15,150/mt. cargo holders were more actively moving goods, with some smelters and traders also selling goods. But downstream buying interest was low, leaving transactions muted. Prices for imported AZ branded zinc were between RMB 15,140-15,150/mt.
The most active SHFE 1405 lead contract price started Wednesday's night session at RMB 13,950/mt, and then tracked LME lead prices down RMB 35/mt, or 0.13%, at a low of RMB 13,900/mt. Traded volumes stood at only 38 lots, and positions held flat at 6,556 lots. On Thursday, SHFE lead prices recouped early losses, boosted by a rebound in LME lead prices, and trended up subsequently to close up RMB 10/mt, or 0.07%, at the intraday high of RMB 13,945/mt. Traded volumes gained 432 lots to 776 lots, and positions added 12 lots to 6,568 lots.

In the Shanghai physical lead market, goods from Chihong Zn & Ge and Nanfang traded between RMB 13,950-13,960/mt, a premium of RMB 30/mt over the most active SHFE 1405 lead contract. Traded prices were RMB 13,940/mt for Humon brand and RMB 13,930/mt for Hanjiang and Shuangyan resources. Chihong Zn & Ge and Hanjiang moved goods only in a limited amount since their output had not returned to normal yet after maintenance, while Nanfang and Humon both were reluctant to trade. These, combined with low selling interest by traders, caused tight lead supply in the Shanghai market. Downstream buying interest was relatively high Wednesday with a rally in SHFE lead prices, but waned Thursday after the futures prices weakened, leaving traded volumes modest.
In Shanghai physical tin market, prices followed LME tin up to RMB 140,500-141,500/mt on Thursday. Yunxi brand tin was offered at RMB 142,000/mt, but trading was subdued. Traders bought in modest amounts, but downstream producers showed little interest.

SMM #1 nickel prices were between RMB 126,600-127,500/mt, down RMB 350/mt. Prices in Wuxi slid by nearly 1 percentage point due to high opening prices and selloffs, allowing traders to sell Jinchuan nickel out of fears that prices would drop. Jinchuan nickel prices dropped to RMB 125,900-126,300/mt in the afternoon, and the price spread between Russian nickel and Jinchuan nickel narrowed to RMB 600-700/mt due to tight Russian nickel supply, with inquiries brisk. But purchases were muted after spot prices fell.

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