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.
On Tuesday night, SHFE 1409 aluminum contract started at RMB 13,550/mt. The most active contract touched a session high of RMB 13,575/mt and session low of RMB 13,530/mt before finishing at RMB 13,545/mt. Trading volumes totaled 25,522 lots, with positions down 2,322 lots to 147,968 lots. On Wednesday, SHFE aluminum for September delivery tumbled to RMB 13,460/mt, but rebounded in the afternoon to end at RMB 13,540/mt. Trading volumes totaled 27,766 lots, with positions down 5,460 lots to 142,508 lots.
Spot aluminum largely traded between RMB 13,350-13,360/mt in Shanghai on Wednesday, a discount of RMB 40-50/mt over SHFE 1407 aluminum contract. Mainstream traded prices were RMB 13,360-13,370/mt in Wuxi and Hangzhou. Downstream producers held back out of bearishness, and traders also cut purchases. In the afternoon, sellers cut offers to RMB 13,340-13,350/mt, but transactions remained thin.
Prices for the most active SHFE 1408 lead contract immediately dipped to RMB 13,860/mt after opening Tuesday’s night session lower at RMB 14,060/mt. SHFE lead prices later bounced back to hover between RMB 14,070-14,090/mt, and finished down RMB 20/mt at RMB 14,070/mt. During the night session, trading volumes for the most active contract totaled merely 152 lots, and positions added 66 lots to 6,834 lots.
On Wednesday, SHFE lead prices sank to as low as RMB 13,910/mt, dampened by a plunge in SHFE copper and zinc prices in the morning trading session, but later rebounded to RMB 13,980-14,000/mt. The metal hovered initially at around RMB 13,960/mt during the afternoon trading session, and then recovered to finish down RMB 85/mt at RMB 14,005/mt. Trading volumes for the SHFE 1408 lead contract amounted to 1,334 lots, and positions lost 174 lots to 6,594 lots.
In the Shanghai physical lead market, goods from Chihong Zn & Ge, Nanfang, and Chengyuan traded Wednesday at RMB 13,880/mt, a RMB 150/mt discount over the most active SHFE 1408 lead contract. Traded prices were RMB 13,850-13,860/mt for Hanjiang and Shuangyan brands and RMB 13,830/mt for Humon brand.
Physical lead prices fell on Wednesday by only RMB 20-30/mt, compared to a RMB 60/mt fall in SHFE lead prices, indicating limited supply available in the Shanghai market. Downstream purchases improved slightly before SHFE lead prices dropped, due partly to a new round of bank loans. Trading activity, however, turned muted following the price fall.
SHFE 1409 zinc contract prices opened at RMB 15,940/mt on Tuesday evening, and inched down to RMB 15,900-15,920/mt as a large number of shorts entered the market, and closing at RMB 15,920/mt, down RMB 85/mt or 0.53%. SHFE 1409 zinc contract prices opened at RMB 15,920/mt on Wednesday, and once fell to RMB 15,800/mt, then plunged near the end of morning trading as a large number of longs closed positions. But SHFE 1409 zinc contract price drop slowed since some bargain hunters entered the market, and closing at RMB 15,775/mt, down RMB 230/mt or 1.44%. Trading volumes increased by 33,756 lots, to 148,214 lots, and total positions of SHFE 1409 zinc contracts decreased by 24,738 lots to 161,286 lots. Total trading volumes decreased by 20,792 lots to 221,190 lots.
#0 zinc prices were between RMB 15,620-15,700/mt, with spot discounts of RMB 80-150/mt against SHFE 1409 zinc contract prices. #1 zinc prices were between RMB 15,600-15,630/mt. SHFE 1409 zinc contract prices dropped to RMB 15,820-15,840/mt during the first trading session, with spot discounts narrowing to RMB 150-130/mt, and allowing some traders to take a wait-and-see attitude. Shuangyan branded #0 prices were between RMB 15,680-15,700/mt, and RMB 15,680-15,690/mt for Yuguang, Jiulong and Qinxin branded #0 zinc. Prices for AZ brand were RMB 15,650-15,660/mt, and RMB 15,600-15,620/mt for other brands. SHFE 1409 zinc contract prices plummeted to RMB 15,460/mt before rebounding to RMB 15,750/mt during the second trading hours, with spot discounts narrowing to RMB 50-30/mt. Shuangyan branded #0 prices were between RMB 15,630-15,650/mt, and RMB 15,600-15,620/mt for regular brands. Supply was ample as arbitrage traders sold goods actively, but a wait-and-see attitude grew, with transactions improving and mainly made among traders. SHFE 1409 zinc contract price volatility was slightly in the afternoon, and spot zinc prices also leveled out, with transactions decreasing. #0 zinc prices were between 15,650-15,700/mt.
In Shanghai physical tin market, mainstream traded prices remained stable between RMB 138,000-139,500/mt on Wednesday. A few traders held back from selling in hopes of better prices on the horizon, while downstream producers showed little interest.
SMM #1 nickel prices were quoted between RMB 130,600-131,000/mt, with spot transactions sluggish. Nickel prices on Wuxi electronic trading surged before falling, with prices between USD 131,000-131,200/mt in the morning. Transactions were muted in the afternoon, with prices around RMB 130,700/mt.