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SMM Base Metals Market Daily Review (2014-6-24)
Jun 25,2014 09:40CST
price review forecast
Prices for the most active SHFE copper contract found brief support at RMB 49,480/mt after starting Monday’s night session at RMB 49,560/mt.

SHANGHAI, Jun. 25 (SMM) –

Prices for the most active SHFE copper contract found brief support at RMB 49,480/mt after starting Monday’s night session at RMB 49,560/mt. SHFE copper prices encountered resistance at RMB 49,690/mt subsequently, and finished up RMB 300/mt at RMB 49,580/mt. During the night session, trading volumes totaled around 70,000 lots, and positions added by 1,746 lots.

On Tuesday, SHFE copper prices initially dipped to a low of RMB 48,230/mt, and rebounded slightly at the tail of the trading to end up RMB 120/mt, or 0.24%, at RMB 49,400/mt. Trading volumes for the most active contract contracted by 146,000 lots, and positions shrank by 4,864 lots.

In the Shanghai physical market, copper was offered Tuesday at a RMB 350-580/mt premium over the SHFE front-month copper contract. Traded prices were RMB 50,150-50,250/mt for standard-quality copper and RMB 50,300-50,450/mt for high-quality copper. As a rebound in SHFE copper prices met resistance and cash flows tightened at the mid-year point, cargo holders stepped up moving goods to raise cash, inflating copper supply. As a result, physical premiums fell sharply, and high-quality copper prices hovered at low levels due to ample supply. Imported copper also secured higher market share. Middlemen expressed limited buying interest at present premiums, and downstream producers regarded prices above RMB 50,000/mt as too high, with light trading activity on Tuesday.

As SHFE copper prices swung in ranges during the afternoon trading session, cargo holders continued to move goods in large volumes, causing physical premiums to narrow further. Copper was largely quoted at a RMB 300-530/mt premium and traded at RMB 50,030-50,270/mt, with Guixi brand offered as low as a RMB 480/mt premium. Trading remained light during the session. 

On Monday night, SHFE 1408 aluminum contract climbed to RMB 13,585/mt after starting at RMB 13,560/mt. However, the most active contract retreated to RMB 13,520/mt later in the session before finishing at RMB 13,545/mt. Trading volumes totaled 20,902 lots, with positions up 304 lots to 131,086 lots.  On Tuesday, SHFE aluminum for August delivery tumbled to RMB 13,425/mt before closing down RMB 35/mt at RMB 13,480/mt. Trading volumes totaled 33,918 lots, with positions off 6,958 lots to 123,824 lots. 

Spot aluminum largely traded between RMB 13,320-13,330/mt in Shanghai on Tuesday, a discount of RMB 80-90/mt over SHFE 1407 aluminum contract. Mainstream traded prices were RMB 13,320-13,340/mt in Wuxi, and RMB 13,350-13,360/mt in Hangzhou. The pullback in SHFE aluminum prices left suppliers anxious to sell and discouraged buyers from entering the market, sending prices down. In the afternoon, sellers cut offers to RMB 13,310-13,320/mt, with sparse deals reported.

Prices for the most active SHFE 1408 lead contract surged briefly to RMB 14,275/mt after starting Monday’s night session higher at RMB 14,170/mt, but later fell back to end up RMB 50/mt at RMB 14,170/mt. During the night session, trading volumes for the most active contract reached 892 lots, and positions expanded 368 lots to 7,246 lots.

On Tuesday, SHFE lead prices initially followed LME lead prices down, but later steadied around RMB 14,145/mt before ending up RMB 25/mt, or 0.18%, at RMB 14,145/mt. Trading volumes for the most active contract added 1,260 lots to 2,758 lots, and positions increased 292 lots to 7,170 lots. Total trading volumes rose by nearly 3,000 lots to around 6,000 lots, and total positions increased 1,106 lots to 17,000 lots on Tuesday. SHFE lead prices are expected to trade in ranges for the near term.

In the Shanghai physical lead market, goods from Chihong Zn & Ge, Chengyuan, and Nanfang traded Tuesday at RMB 13,970-13,980/mt, a RMB 180/mt discount over the most active SHFE 1408 lead contract. Traded prices were around RMB 13,950/mt for Tongguan, Hanjiang, and Shuangyan brands, and RMB 13,940/mt for Humon brand. Lead smelters slightly ramped up deliveries, pressured by tight liquidity at the end of June, and trading activity among traders weakened due to widening price gap between SHFE and physical lead prices. Downstream producers expressed lower buying interest after lead prices rose on Tuesday.

SHFE 1409 zinc contract prices opened at RMB 15,810/mt on Monday evening, then touched a 15-month high of RMB 15,840/mt, but falling to RMB 15,760/mt later the day, and closing at RMB 15,765/mt, up RMB 5/mt or 0.03%. SHFE 1409 zinc contract prices opened at RMB 15,765/mt on Tuesday, then fell as a large number of longs left the market, down by as much as 1% in the afternoon. But since LME zinc prices rallied, SHFE 1409 zinc contract price declines slowed and closed at RMB 15,670/mt, down RMB 90/mt or 0.57%. Trading volumes increased by 10,312 lots, to 63,392 lots, and total positions decreased by 4,482 lots, to 126,064 lots. Total positions of SHFE zinc were up 18,712 lots to 99,674 lots.
#0 zinc prices were between RMB 15,550-15,580/mt, with spot discounts of RMB 150-130/mt against SHFE 1409 zinc contract prices. #1 zinc prices were between RMB 15,500-15,520/mt. Shuangyan branded #0 prices were between RMB 15,570-15,580/mt, and RMB 15,560-15,570/mt for Yuguang branded #0 zinc. Prices for Tianlu and Baohui brands were RMB 15,540-15,550/mt, and RMB 15,520-15,530/mt for AZ branded #0 zinc, with RMB 15,490-15,500/mt for other brands. Spot discounts narrowed as SHFE zinc price gains slowed. Supply of mainstream brands was limited due to maintenance at smelters, when combined with low imported zinc supply, goods availability was tight. Traders busy settling lacked interest in operations, and downstream buyers also took a wait-and-see attitude, leaving overall transactions muted.

SHFE 1409 zinc contract prices inched down to RMB 15,605/mt in the afternoon, with #0 zinc prices between RMB 15,510-15,560/mt, and spot discounts between RMB 110-90/mt. #0 zinc prices were as low as RMB 15,510-15,540/mt, and supply grew slightly as some arbitrage traders moved goods. As SHFE 1409 zinc contract prices rose slightly later the day, #0 zinc prices edged up to RMB 15,560-15,570/mt.
In Shanghai physical tin market, mainstream traded prices remained stable between RMB 138,000-140,000/mt on Tuesday. Small amounts of goods traded at RMB 137,800/mt. Consumption was sluggish in the offseason.  
SMM #1 nickel prices were quoted between RMB 126,000-126,700/mt. Jinchuan lowered nickel prices by RMB 1,300/mt to RMB 126,500/mt, with transactions muted. Spot prices dropped to RMB 124,800-125,500/mt in the afternoon, with trading quiet.



SHFE copper prices
SHFE aluminum prices
SHFElead prices
SHFEzinc prices
Shanghai tin prices
Shanghai nickel prices

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