SHANGHAI, Aug. 11 (SMM)--
The most active SHFE 1410 copper contract started Thursday's night session at RMB 49,700/mt, and then surged to RMB 50,030/mt before ending up RMB 140/mt at RMB 49,860/mt. During the night session, trading volumes for the most active contract totaled around 150,000 lots, and positions gained by 9,024 lots.
On Friday, SHFE copper prices fell to as low as RMB 49,550/mt during the afternoon trading session, and finished down RMB 10/mt, or 0.02%, at RMB 49,710/mt. Trading volumes for the SHFE 1410 copper contract decreased by 8,840 lots, and positions added by 16,540 lots. The price of the red metal is expected to trade in ranges for the near term, meeting resistance at the 5-day moving average.
In the Shanghai physical market, copper was offered Friday at a RMB 0-60/mt premium over the SHFE 1408 copper contract. Traded prices were RMB 50,180-50,250/mt for standard-quality copper and RMB 50,220-50,300/mt for high-quality copper. As SHFE copper prices fell back, the price gap between the SHFE 1408 and 1409 copper contracts hovered at around RMB 200/mt. Cargo holders continued to ramp up deliveries at highs, while copper imports increased as the SHFE/LME copper price ratio improved. The resultant growing supply caused physical premiums to narrow. The price of standard-quality copper, however, remained firm, flat with that of high-quality copper. Speculators entered the market to buy low-priced goods in the morning trading session, while downstream producers bought on an as-needed basis ahead of the weekend.
The price gap between the SHFE 1408 and 1409 copper contracts expanded slightly to some RMB 250/mt during the afternoon trading session when the front-month copper contract approached the RMB 50,000/mt mark. Physical copper was largely offered between a RMB 10/mt discount and a RMB 60/mt premium and traded lower at RMB 50,080-50,200/mt. Some middlemen and downstream producers entered the market to hunt for bargains. SHFE copper inventories decreased by 7,447 mt to 100,946 mt.
Last Thursday night, SHFE 1410 aluminum contract started at RMB 14,120/mt. Prices touched a session high of RMB 14,185/mt and session low of RMB 14,090/mt. Trading volumes totaled 63,422 lots, with positions up 4,576 lots to 152,496 lots.
Last Friday, the most active contract moved lower to RMB 14,060/mt as investors closed positions, drawing no support from strong Chinese trade data for July. The light metal closed at RMB 14,085/mt. Trading volumes totaled 40,084 lots, with positions down 5,822 lots to 146,674 lots.
Spot aluminum largely traded at RMB 14,000-14,020/mt in Shanghai and Wuxi last Friday, a discount of RMB 10-30/mt over SHFE 1408 aluminum contract, versus RMB 14,010-14,030/mt in Hangzhou. Downstream demand picked up as the weekend is approaching. In the afternoon, sellers cut offers slightly after the front-month contract moved lower, but few deals closed.
SHFE 1410 zinc contract prices opened lower at RMB 16,820/mt on Thursday evening, and fluctuated between RMB 16,860-16,960/mt, and closing at RMB 16,870/mt, down RMB 50/mt or 0.3%. Trading volumes grew by 83,228 to 345,408 lots, and total positions decreased by 1,636 to 264,310 lots. SHFE 1410 zinc contract prices opened at RMB 16,870/mt on Friday, and inched down as LME zinc prices pulled down, slumping to a two-week low of RMB 16,595/mt in the afternoon, and closing at RMB 16,640/mt, down RMB 280/mt or 1.65%. Trading volumes increased by 237,798 lots, to 753,548 lots, and total positions decreased by 22,480 lots to 241,830 lots. SHFE 1410 zinc contract prices are expected to test support from RMB 16,500/mt this evening due to the exodus of longs and falling LME zinc prices.
#0 zinc prices were between RMB 16,750-16,840/mt, with spot prices RMB 0-30/mt above SHFE 1410 zinc contract prices. #1 zinc prices were between RMB 16,750-16,780/mt. SHFE 1410 zinc contract prices opened at RMB 16,865/mt and inched down to RMB 16,800-16,820/mt, once falling to as low as RMB 16,730/mt at the end of trading. The price spread between brands narrowed, with cargo holders holding goods. Some smelters held back goods, and some traders purchased actively at lower prices, causing trading to improve. Shuangyan branded #0 zinc prices were RMB 16,760-16,840/mt, with RMB 16,750-16,820/mt for Yuguang, Feilong and Jiulong brand zinc. A large amount of imported zinc flowed into China, with AZ brand #0 zinc prices between RMB 16,730-16,800/mt. SHFE 1410 zinc contract prices fell to RMB 16,610-16,640/mt in the afternoon, with spot premiums expanding to RMB 10-50/mt against SHFE 1410 zinc contract prices, and a wait-and-see sentiment prevailing in the market.
Lead for October delivery, the most active contract, opened Thursday's night session at RMB 14,770/mt, and then tracked LME lead prices up to RMB 14,870/mt, closing at RMB 14,805/mt. During the night session, trading volumes for the SHFE 1410 lead contract totaled 53,872 lots, and positions expanded 870 lots to 37,266 lots.
On Friday, SHFE lead prices tracked LME lead prices down to as low as RMB 14,645/mt, and ended down RMB 15/mt at RMB 14,725/mt. Trading volumes for the SHFE 1410 lead contract rose to 82,784/mt, but positions fell 1,352 lots to 35,044 lots on Friday.
In the Shanghai physical lead market, goods from Chihong Zn & Ge were initially offered at RMB 14,650/mt, a RMB 90/mt discount over the most active SHFE 1410 lead contract, but traded lower at RMB 14,630/mt. Chengyuan and Nanfang resources were quoted at a RMB 80/mt discount over the SHFE 1410 lead contract and at a RMB 40/mt discount over the SHFE 1409 lead contract. Humon supply was offerd at RMB 14,600/mt, but barely traded. Falling SHFE lead prices prompted traders to discount goods, but downstream purchases were light due to increasing bearish sentiment. Physical lead was quoted at as low as RMB 14,550-14,600/mt during last Friday's afternoon trading hours.
In Shanghai spot tin market, the high-end price dropped RMB 500/mt, bringing mainstream traded prices to RMB 139,500-141,500/mt last Friday. Poor sales and falling LME tin kept downstream producers in domestic markets cautious about buying, sending prices down. However, limited supply prevented prices from falling sharply.
SMM #1 nickel prices were between RMB 130,000-130,500/mt, with spot trading quiet in the morning. Traders turned cautious after LME nickel prices fell after touching USD 19,000/mt, with traded prices down to RMB 129,900-130,500/mt. Transactions were extremely muted in the afternoon as traders left the market at the week's end, with end-user demand expected to remain soft in August.