SHANGHAI, Jul. 18 (SMM) – The most active SHFE 1409 copper contract fell to test support at the RMB 50,000/mt mark after starting Wednesday’s night session at RMB 51,510/mt, dampened by a fall in LME copper prices on profit-taking. SHFE copper prices closed the night session down RMB 500/mt at RMB 50,050/mt, with trading volumes at some 210,000 lots and positions up by 642 lots.
On Thursday, the SHFE 1409 copper contract continued to hover around the RMB 50,000/mt mark, but dropped to an intraday low of RMB 49,810/mt at the tail of the trading before ending down RMB 630/mt, or 1.25%, at RMB 49,920/mt. Trading volumes for the most active contract gained by 89,038 lots, and positions shed by 12,416 lots. Trading volumes for the SHFE 1410 copper contract added by 16,290 lots, and positions rose by 11,608 lots.
In the Shanghai physical market, copper was offered Thursday between a RMB 30/mt discount and a RMB 100/mt premium over the SHFE 1408 copper contract. Traded prices were RMB 50,250-50,330/mt for standard-quality copper and RMB 50,300-50,430/mt for high-quality copper. As SHFE copper prices fell sharply, some copper for arbitrage flowed out, with a variety of brands available in the market. Although cargo holders intended to push up physical premiums during the morning trading, premiums narrowed rapidly amid growing supply. SHFE copper hovered in wide ranges on Thursday, meeting resistance at the RMB 50,000/mt mark. Middlemen thus expressed lower buying interest, while downstream producers went bargain-hunting out of fears that prices will fall, with modest trading volumes.
As SHFE copper prices steadied during the afternoon trading session, an increasing number of cargo holders moved goods, aggravating pressure from rising supply. As a result, copper was offered between a RMB 30/mt discount and a RMB 70/mt premium, and traded at RMB 50,350-50,450/mt. Trading volumes remained limited on Thursday.