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SMM Base Metals Market Daily Review (2014-6-11)
Jun 12,2014 10:25CST
price review forecast
The most active SHFE copper contract opened Tuesday’s night session at RMB 47,460/mt, meeting resistance at RMB 47,670/mt, and finished up RMB 100/mt at RMB 47,620 mt.

SHANGHAI, Jun. 12 (SMM) –

The most active SHFE copper contract opened Tuesday’s night session at RMB 47,460/mt, meeting resistance at RMB 47,670/mt, and finished up RMB 100/mt at RMB 47,620 mt. During the night session, traded volumes for the most active contract fell to some 80,000 lots, and positions gained by 2,108 lots.

On Wednesday, SHFE copper prices rose to RMB 47,750/mt after testing a low at RMB 47,410/mt, and advanced to an intraday high of RMB 47,960/mt at the tail of the trading before ending up RMB 340/mt, or 0.72%, at RMB 47,860/mt. Traded volumes for the most active contract contracted by 14,290 lots, and positions expanded by 868 lots.

In the Shanghai physical market, copper was offered Wednesday at a RMB 0-130/mt premium over the SHFE front-month copper contract. Traded prices were RMB 48,450-48,570/mt for standard-quality copper and RMB 48,530-48,670/mt for high-quality copper. As SHFE copper prices rebounded, cargo holders continued to move goods at firm prices, and middlemen also entered the market with mixed views towards copper prices. Meanwhile, downstream producers were still purchasing goods only to need. Trading activity in the market improved slightly on Wednesday, with transactions done mostly among middlemen.

As SHFE copper prices climbed during the afternoon trading session, the price gap between the SHFE 1406 and 1407 copper contracts narrowed slightly. Middlemen continued to enter the market to buy low-price goods, and physical supply decreased, with standard-quality copper barely found in the market. Copper was mostly quoted at a RMB 20-140/mt premium and traded between RMB 48,530-48,700/mt on Wednesday.

On Tuesday night, SHFE 1408 aluminum contract crept higher to RMB 13,700/mt after starting at RMB 13,595/mt, and finished the night session at RMB 13,665/mt. Trading volumes totaled 122,274 lots, with positions up 9,242 lots to 183,580 lots. On Wednesday, the most active contract declined to RMB 13,605/mt due to profit taking at highs before ending down RMB 40/mt at RMB 13,635/mt. Trading volumes totaled 77,334 lots, with positions down 1,136 lots to 182,444 lots.

Spot aluminum largely traded between RMB 13,370-13,380/mt in Shanghai on Wednesday, a discount of RMB 80-90/mt over SHFE 1406 aluminum contract. Mainstream traded prices were RMB 13,340-13,350/mt Wuxi and RMB 13,380-13,390/mt in Hangzhou. Trading activity improved from a day earlier. In the afternoon, rising SHFE aluminum prices allowed sellers to raise offers to RMB 13,390-13,400/mt, with thin trading volumes reported.

The most active SHFE 1408 lead contract hovered at RMB 14,100/mt after starting Tuesday’s night session at RMB 14,045/mt, and closed up RMB 25/mt at RMB 14,090/mt. During the night session, traded volumes for the most active contract reached 322 lots, and positions lost 34 lots to 5,250 lots.

On Wednesday, SHFE lead prices rose as high as to RMB 14,340/mt, but later fell back to end up RMB 40/mt at RMB 14,105/mt. Traded volumes increased sharply to 1,972 lots, and positions expanded 188 lots to 5,472 lots.

In China’s physical lead markets, quotations for goods from Chihong Zn & Ge initially were above RMB 14,000/mt, but later fell to RMB 13,980/mt, at a broader 160-170/mt discount over the most active SHFE 1408 lead contract. Traded prices were around RMB 13,975/mt for Nanfang and Tongguan resources and RMB 13,950-13,960/mt for Humon brand and Shuangyan supply wrapped with plastic sheet. Traders and downstream producers were cautious about buying with a wait-and-see view towards lead price movements.

SHFE 1408 zinc contract prices opened at RMB 15,390/mt on Monday evening, then touched RMB 15,560/mt, a record high since last April, and closing at RMB 15,555/mt, up RMB 190/mt or 1.24%. SHFE 1408 zinc contract prices opened at RMB 15,540/mt, and surged to RMB 15,725/mt as a large number of longs entered the market, a record high last seen in March 2013. In the afternoon, SHFE 1408 zinc contract price gains narrowed, and closing at RMB 15,630/mt, up RMB 265/mt or 1.72%. Trading volumes increased by 133,910 lots, to 167,862 lots, and total positions increased by 17,172 lots, to 140,218 lots.

#0 zinc prices were between RMB 15,550-15,600/mt, with spot discounts of RMB 100-150/mt against SHFE 1408 zinc contract prices. #1 zinc prices were between RMB 15,490-15,530/mt. SHFE zinc prices rose to RMB 15,700/mt after opening, but LME zinc price increases were limited, causing a wait-and-see attitude to grow. Smelters were more actively selling, but some cargo holders remained unwilling to sell goods due to market optimism. Spot transactions were brisk due to large zinc price volatility, while downstream buying interest was low and transactions were mainly made among traders. Shuangyan branded #0 prices were between RMB 15,580-15,600/mt, and RMB 15,550-15,580/mt for Yuguang and Qinxin branded #0 zinc. Imported #0 zinc prices were between RMB 15,470-15,500/mt. SHFE 1408 zinc contract prices fell slightly and leveled out at RMB 15,615/mt in the afternoon, with #0 zinc prices between RMB 15,520-15,560/mt.

In Shanghai physical tin market, mainstream traded prices followed LME tin prices down to RMB 138,500-140,000/mt on Wednesday. Jinlong, Nanshan and Weitai brand tin traded at the lower end of the price band. However, lower prices failed to stoke much buying.

SMM #1 nickel prices were quoted between RMB 129,500-130,000/mt. Jinchuan lowered nickel prices by RMB 2,500/mt to RMB 130,000/mt. As Jinchuan prices on the Wuxi electronic trading were between RMB 129,900-130,000/mt, traders lacked interest in operations, and end-users stayed on the sidelines, leaving transactions muted.



SHFE copper prices
SHFE aluminum prices
lead prices
zinc prices
tin prices
nickel prices

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