SHANGHAI, Jun 6 (SMM) –
Dragged down by LME copper prices falling below the USD 6,800/mt mark, SHFE copper prices opened significantly lower at RMB 47,880/mt during Wednesday’s night session. The red metal later recouped some losses due to shorts taking profits, but still encountered resistance at RMB 48,140/mt before ending down RMB 90/mt at RMB 48,130/mt. During the night session, traded volumes rose to around 150,000 lots, while positions added 896 lots.
On Thursday, SHFE copper prices hovered largely between RMB 48,000-48,200/mt, but rose to an intraday high of RMB 48,340/mt at the tail of the trading, ending up RMB 100/mt, or 0.21%, at RMB 48,320/mt. Traded volumes for the most active contract expanded 43,428 lots, while positions shed 3,588 lots.
Trading activity turned lighter after SHFE copper prices gradually stabilized during the afternoon trading session. Some cargo holders of high-quality copper voluntarily lowered premiums to make deals, while prices for standard-quality copper remained firm. Physical copper was quoted largely at a RMB 400-520/mt premium, and traded between RMB 49,880-50,080/mt on Thursday.
The most active SHFE 1408 aluminum contract started Wednesday’s night session at RMB 13,300/mt, and then rebounded to RMB 13,380/mt before finishing at RMB 13,375/mt. During the night session, traded volumes amounted to 23,910 lots, while positions decreased 72 lots to 135,732 lots.
On Thursday, SHFE aluminum prices fluctuated mostly around the settle prices of the night session, and rallied sharply to RMB 13,425/mt at the tail of the trading, ending down RMB 25/mt at RMB 13,400/mt. Traded volumes were 19,908 lots, while positions lost 1,498 lots.
Physical aluminum traded mostly between RMB 13,160-13,170/mt in Shanghai on Thursday, a discount of RMB 70-80/mt over the SHFE 1406 aluminum contract. Mainstream traded prices were RMB 13,140-13,150/mt Wuxi and RMB 13,180-13,200/mt in Hangzhou. Downstream producers rarely purchased goods, expecting further declines in the SHFE front-month aluminum contract following a 5-day losing streak. Some middlemen hunted for bargains, but traded volumes were still rather light. Cargo holders cut supplies in the afternoon, with quotations moving higher.
Lead for August delivery became the most active contract on the Shanghai Futures Exchange on Wednesday, with no traded volumes reported for the contract during the night session. The SHFE 1407 and 1409 lead contracts both fell RMB 10-20/mt, with around 10 lots of traded volumes for these two contracts.
On Thursday, SHFE lead prices dipped as low as RMB 14,005/mt after starting at RMB 14,020/mt, and closed down RMB 5/mt at RMB 14,020/mt. Traded volumes for the SHFE 1408 lead contract totaled only 184 lots, while those for the SHFE 1406 lead contract reached more than 1,000 lots on Thursday.
In the Shanghai physical lead market, goods from Chihong Zn & Ge, Nanfang, and Humon traded Thursday largely at RMB 13,900/mt, a RMB 120/mt discount over the most active SHFE 1408 lead contract. Hanjiang and Shuangyan resources were sold at RMB 13,890/mt, with relatively few quotes.
Traders were actively moving goods, but downstream producers expressed little buying interest due to sluggish consumption, mounting finished goods inventories, as well as tight liquidity. Meanwhile, some producers also turned to purchase secondary refined lead. Warehouse receipts for goods in the Guangdong market traded at an around RMB 20/mt over the SHFE 1406 lead contract. Supply in Jiangxi, Henan, and Hunan provinces increased significantly from a month ago.
SHFE 1408 zinc contract prices opened at RMB 15,150/mt, and closing at RMB 15,170/mt, down RMB 10/mt or 0.07%. SHFE 1408 zinc contract prices opened at RMB 15,170/mt on Thursday, and were dragged down by LME zinc prices to RMB 15,160/mt. As LME zinc prices rebounded in the afternoon, SHFE 1408 zinc contract prices rose, and closing at RMB 15,195/mt, up RMB 15/mt or 0.1%. Trading volumes increased by 894 lots, to 12,248 lots, and total positions increased by 1,030 lots, to 73,798 lots.
#0 zinc prices were between RMB 15,150-15,170/mt, with spot discounts of RMB 0-20/mt against SHFE 1408 zinc contract prices. #1 zinc prices were between RMB 15,120-15,130/mt. SHFE zinc prices hovered around RMB 15,175/mt, depressing trader interest in operations. Continuously falling zinc prices kept some cargo holders and smelters unwilling to sell goods. But supply was sufficient due to cash flow tightness, while downstream buying interest was low. Shuangyan branded #0 zinc prices were between RMB 15,170-15,175/mt, with RMB 15,160/mt for Yuguang, Qinxin and Feilong branded #0 zinc. AZ and Belgian branded #0 zinc prices were around RMB 15,130/mt, with some trading made at RMB 15,120/mt. SHFE 1408 zinc contract prices edged up in the afternoon, with #0 zinc prices between RMB 15,150-15,170/mt.
Spot tin prices in Shanghai were between RMB 139,000-140,500/mt, with RMB 139,200/mt for Yunxiang branded tin, and RMB 138,800-139,000/mt for Jinlong and Nanshan branded tin. Transactions for second and third-line brands improved, with goods availability below RMB 139,000/mt limited in the afternoon.
SMM #1 nickel prices were quoted between RMB 133,200-133,600/mt. Transactions were brisk in the morning as traders had arbitrage opportunities on the Wuxi electronic trading, with Russian nickel traded RMB 500-600/mt below prices on the Wuxi electronic trading and Jinchuan nickel traded RMB 100-300/mt below prices on the Wuxi electronic trading. Traded prices were within SMM quote range, with transactions muted in the afternoon and downstream buying interest low. It was reported some NPI producers sold off goods to generate cash.