SHANGHAI, Jul. 3 (SMM) – Prices for the most active SHFE 1409 copper contract followed LME copper prices up to a high of RMB 50,530/mt after starting Tuesday’s night session at RMB 50,340/mt. SHFE copper prices fell back subsequently to close up RMB 240/mt at RMB 50,370/mt. Trading volumes for the most active contract decreased to around 110,000 lots, and positions gained by 3,756 lots.
On Wednesday, SHFE copper prices gave back all gains made during the night session, dipping to RMB 49,860/mt, and hovered largely around the RMB 50,000/mt mark during the afternoon trading session. The red metal bounced back at the tail of the trading to regain all losses, and finished up RMB 190/mt, or 0.38%, at RMB 50,320/mt. Trading volumes for the SHFE 1409 copper contract contracted by 83,306 lots, and positions lost by 738 lots. Total trading volumes and positions decreased by 150,000 lots and 15,192 lots, respectively. SHFE copper prices have now found solid support at the 5-day moving average and are not expected to experience a sharp fall in the foreseeable future.
In the Shanghai physical market, copper was offered Wednesday at a RMB 80-300/mt premium over the SHFE 1407 copper contract. Traded prices were RMB 51,200-51,550/mt for standard-quality copper and RMB 51,320-51,700/mt for high-quality copper. SHFE copper prices surrendered early gains, while the improving SHFE/LME copper price ratio resulted in inflows of imported copper, both prompting cargo holders to ramp up deliveries at high prices. A variety of copper brands were found in the market in ample volumes, with a higher proportion of imported copper. A plunge in base metals prices by the midday dragged down copper prices, and most cargo holders cut physical premiums out of fears that prices will fall further. Meanwhile, middlemen and downstream producers held a wait-and-see attitude on Wednesday.
Despite a rebound in SHFE copper prices during the afternoon trading session, cargo holders continued to cut physical premiums out of fears that prices would fall in the future. Prices for standard-quality copper held firm, drawing closer to those for high-quality copper. Physical copper was largely quoted at a RMB 80-250/mt premium and traded at RMB 51,200-51,450/mt. Trading volumes were sluggish with supply slightly outstripping demand on Wednesday.