SHANGHAI, Jul. 7 (SMM) – Prices for the most active SHFE 1409 copper contract tracked LME copper prices up after starting Thursday’s night session at RMB 51,070/mt, but later encountered resistance at RMB 51,580/mt. The red metal closed up RMB 560/mt at RMB 51,480/mt. During the night session, trading volumes held steady around 270,000 lots, and positions added by 15,152 lots.
On Friday, SHFE copper prices fluctuated largely between RMB 51,300-51,500/mt, and finished up RMB 460/mt, or 0.9%, at RMB 51,380/mt. Trading volumes for the most active contract decreased by 65,994 lots, and positions gained by 1,980 lots. SHFE copper prices are likely to continue to rebound in the near future with positive technical indicators.
In the Shanghai physical market, copper was offered Friday between a RMB 120/mt discount and a RMB 80/mt premium over the SHFE 1407 copper contract. Traded prices were RMB 52,150-52,270/mt for standard-quality copper and RMB 52,250-52,400/mt for high-quality copper. As SHFE copper prices extended gains on Friday, some cargo holders held prices firm, while others moved goods actively at lower premiums to raise cash. Physical copper was quoted at a discount by the midday. Middlemen entered the market to buy low-priced goods, but downstream producers stayed on sidelines out of fears that prices would fall. Trading activity was light on Friday.
As SHFE copper prices leveled out during the afternoon trading session, some traders entered the market to buy. Standard-quality copper traded at a narrower discount due to falling supply, while high-quality copper also was quoted at a marginal premium. Physical copper was offered largely between a RMB 70/mt discount and a RMB 20/mt premium and traded at RMB 52,170-52,320/mt. Trading activity during this session improved. SHFE copper inventories for the week ending July 4 gained 2,376 mt to 81,351/mt.