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SMM Base Metals Market Daily Review (2014-6-13)
Jun 16,2014 10:12CST
price review forecast
The most active SHFE copper contract started Thursday's night session lower at RMB 47,500/mt, and closed down RMB 260/mt at RMB 47,370/mt.

SHANGHAI, Jun.16 (SMM)--

The most active SHFE copper contract started Thursday's night session lower at RMB 47,500/mt, and closed down RMB 260/mt at RMB 47,370/mt. During the night session, traded volumes stood at around 150,000 lots, and positions gained by 934 lots.

On Friday, SHFE copper prices rose to a high of USD 47,860/mt, and finished up RMB 100/mt, or 0.21%, at RMB 47,730/mt. Traded volumes for the most active contract expanded by 95,884 lots, and positions lost by 14,006 lots. Positions for the SHFE 1406 copper contract shed by 7,960 lots.

In the Shanghai physical market, copper was offered Friday at a RMB 200-320/mt premium over the SHFE front-month copper contract. Traded prices were RMB 48,950-49,120/mt for standard-quality copper and RMB 49,020-49,200/mt for high-quality copper. The SHFE front-month copper contract rose sharply on Friday, sending the price gap between the SHFE 1406 and 1407 copper contracts up to RMB 800/mt. This gave cargo holders an incentive to move goods at higher premiums. Standard-quality was still rarely found in the market during the morning trading, but physical supply increased by the midday as the price gap narrowed to RMB 600/mt. Middlemen expressed modest buying interest, and some cargo holders stayed on the sidelines, expecting higher premiums after the delivery date. Meanwhile, downstream producers were reluctant to buy at prices above RMB 49,000/mt, with trading activity being quite on Friday.

SHFE copper prices encountered difficulties in rising during the afternoon trading session, and trading activity was sluggish, prompting some cargo holders to move goods at lower prices. Physical copper was largely quoted last Friday at a RMB 120-250/mt premium and traded between RMB 49,000-49,150/mt. Although the SHFE front-month copper contract rallied at the tail of the trading, cargo holders mostly stayed on the sidelines or cut premiums sharply, with those for high-quality copper down as low as RMB 10/mt. Meanwhile, SHFE copper inventories contracted by 4,571 mt to 81,929 mt.
Last Thursday night, SHFE 1408 aluminum contract slid to RMB 13,385/mt after starting at RMB 13,470/mt, and finished the night session at RMB 13,400/mt. Trading volumes totaled 92,796 lots, with positions up 1,860 lots to 169,584 lots. Last Friday, the most active contract rebound on short-covering and closed the day at RMB 13,470/mt. Trading volumes totaled 58,046 lots, with positions down 13,630 lots to 155,954 lots.
Spot aluminum largely traded between RMB 13,230-13,240/mt in Shanghai last Friday, a discount of RMB 60-70/mt over SHFE 1406 aluminum contract. Mainstream traded prices were RMB 13,210-13,220/mt Wuxi and RMB 13,250-13,260/mt in Hangzhou. Demand picked up ahead of the weekend. In the afternoon, rising SHFE aluminum prices allowed cargo holders to raise offers to RMB 13,240-13,250/mt, with sparse transactions reported.

SHFE 1408 zinc contract prices opened at RMB 15,525/mt on Thursday evening, then fell below the 5-day moving average, and closing at RMB 15,325/mt, down RMB 255/mt or 1.64%. SHFE 1408 zinc contract prices opened at RMB 15,325/mt, and rose to RMB 15,400/mt due to rising LME zinc prices, but were weighed down as a large number of longs left the market after profit-taking, and closing at RMB 15,365/mt, down RMB 215/mt or 1.38%. Trading volumes decreased by 30,026 lots, to 52,372 lots, and total positions decreased by 11,492 lots, to 111,326 lots.
#0 zinc prices were between RMB 15,280-15,320/mt, with spot discounts of RMB 20-50/mt against SHFE 1408 zinc contract prices. #1 zinc prices were around RMB 15,250/mt. SHFE 1408 zinc contract prices edged down to RMB 15,310-15,390/mt. Imported zinc supply increased, and cargo holders moved goods actively. Downstream buyers purchased modestly at the week's end and due to falling zinc prices, causing transactions to improve. Shuangyan branded #0 prices were between RMB 15,300-15,320/mt, and RMB 15,280-15,300/mt for Yuguang, Qinxin and Feilong branded #0 zinc and RMB 15,240-15,250/mt for imported #0 zinc. SHFE 1408 zinc contract prices leveled out in the afternoon, with #0 zinc prices between RMB 15,280-15,330/mt.
The most active SHFE 1408 lead contract opened Thursday's night session at RMB 14,035/mt, and ended down RMB 80/mt at RMB 13,965/mt. During the night session, traded volumes for the most active contract were 168 lots, and positions were off 64 lots to 5,348 lots. No transactions were reported for the SHFE 1406 lead contract.
On Friday, SHFE lead prices initially dipped to RMB 13,910/mt, hovering between RMB 14,020-14,040/mt during the morning trading session, and rose to the RMB 13,950-13,970/mt range subsequently. Prices for the contract closed down RMB 120/mt at RMB 13,925/mt on Friday. Traded volumes 1,562 lots, and positions added 132 lots to 5,544 lots.

In the Shanghai physical lead market, prices for Chihong Zn & Ge, Nanfang, and Chengyuan brands traded initially at RMB 13,880/mt last Friday, a narrower discount of RMB 60/mt over the most active SHFE 1408 lead contract, but later fell to RMB 13,860/mt. Traded prices were RMB 13,850/mt for Humon, Shuangyan, and Shaanxi Zinc Industry resources. Traders were moving gods actively, and downstream producers also ramped up purchases last Friday.
In Shanghai physical tin market, mainstream traded prices followed LME tin down to RMB 138,000-139,500/mt last Friday. Small amounts of goods from Jiangxi traded lower at RMB 137,800/mt. Consumption was sluggish.
SMM #1 nickel prices were quoted between RMB 127,400-128,000/mt. Traders were actively selling as prices rose, but end-users remained cautious, with transactions made between RMB 125,000-128,000/mt. due to China's probe into financing fraud at the Port of Qingdao, which caused sell offs, the price spread between Russian nickel and Jinchuan nickel once expanded to RMB 1,100/mt. The spot market muted again in the afternoon as prices fell.


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