SHANGHAI, Oct. 11 (SMM)--
The most active SHFE 1412 copper contract surged to RMB 48,090/mt during Thursday's night session after starting at RMB 47,630/mt, and closed up RMB 170/mt at RMB 47,740/mt. During the night session, trading volumes for the most active contract held steady at 190,000 lots, and positions gained by 4,914 lots.
On Friday, SHFE copper initially hovered around the RMB 47,500/mt mark, but fell to RMB 47,170/mt at the tail of the trading before finishing down RMB 330/mt, or 0.69%, at RMB 47,240/mt. Trading volumes for the SHFE 1412 copper contract added by 9,494 lots, and positions increased by 32,782 lots. Trading volumes for the SHFE 1501 lead contract rose by 43,576 lots, and positions expanded 29,712 lots.
Physical copper in Shanghai was quoted Friday at a RMB 40-150/mt premium to the SHFE 1410 copper contract. Traded prices were RMB 48,300-48,400/mt for standard-quality copper and RMB 48,380-48,500/mt for high-quality copper.
As SHFE copper leveled off, some middlemen continued buying high-quality copper to meet demand from long-term contracts, while downstream producers ramped up purchases at low prices. Cargo holders were inclined to hold prices firm against declining supply, helping push up physical premiums. Trading activity improved slightly on Friday.
As SHFE copper fell during the afternoon trading session, the price gap between the SHFE 1410 and 1411 copper contract expanded to around RMB 500/mt, prompting cargo holders to move goods. Physical copper was quoted largely at a RMB 30-150/mt premium and traded at RMB 48,230-48,480/mt. Trading activity was light even though some downstream producers went bargain-hunting at prices below RMB 47,300/mt. SHFE copper inventories for the week ending October 10 decreased 3,487 lots to 82,770 lots.
On Thursday night, SHFE 1412 aluminum contract started at RMB 13,870/mt. The most active contract touched session low of RMB 13,855/mt and session high of RMB 13,960/mt before finishing at RMB 13,870/mt. Trading volumes totaled 45,594 lots, with positions up 2,528 lots to 147,824 lots.
On Friday, prices touched an intraday low of RMB 13,715/mt in the afternoon as investors cut long positions. The contract closed RMB 125/mt or 0.9% lower at RMB 13,735/mt. Trading volumes surged 16,602 lots to 116,263 lots, with positions down 4,256 lots to 141,040 lots. Technical indicators are negative.
Spot aluminum largely traded at RMB 13,800-13,820/mt in Shanghai on Friday, discounts of RMB 0-10/mt and premiums of RMB 0-10/mt over SHFE 1410 aluminum contract, versus RMB 13,800-13,830/mt in Wuxi and RMB 13,810-13,830/mt in Hangzhou. Buyers showed little interest, waiting for prices to fall. In the afternoon, sellers held back goods after SHFE aluminum fell further. A few deals closed between RMB 13,800-13,810/mt.
SHFE 1412 zinc contract prices opened at RMB 16,865/mt on Thursday evening, and touched as high as RMB 16,985/mt. But as a large number of longs left the market after taking profit, SHFE 1412 zinc contract prices fell and found support from RMB 16,830/mt, closed at RMB 16,830/mt, up RMB 25/mt or 0.15%. Trading volumes increased 31,680 to 268,630 lots, and total positions decreased by 930 to 186,122 lots. SHFE 1412 zinc contract prices opened at RMB 16,830/mt October 10, holding stable around RMB 16,800/mt in the morning. But dragged down by LME zinc prices, SHFE 1412 zinc contract prices tumbled to RMB 16,600/mt, and closed at RMB 16,645/mt, down RMB 160/mt or 0.95%. Trading volumes increased 81,636, to 509,334 lots, and total positions were down by 14,244 lots to 172,808 lots. SHFE 1412 zinc contract prices are expected to fluctuate weakly.
#0 zinc prices were between RMB 16,960-17,040/mt, with spot premiums of RMB 180-240/mt against SHFE 1412 zinc contract prices. #1 zinc prices were between RMB 16,930-16,960/mt. SHFE 1412 zinc contract prices fluctuated in a wide range, and dipped to as low as RMB 16,705/mt, but rallied to RMB 16,800/mt later on, with spot premiums between RMB 200-220/mt in the morning. Spot premiums expanded to RMB 200-240/mt later the day. Spot premiums of Qilin zinc were lowered to RMB 180-230/mt due to ample supply. Traders bought at lows whilst selling at highs, and downstream buyers replenished stocks at the week's end, causing transactions to improve. Shuangyan branded #0 zinc prices were RMB 16,990-17,040/mt, and prices for Yuguang were RMB 16,980-17,030/mt. Qilin, Qinxin and Feilong zinc prices were RMB 16,960-17,020/mt. Prices for Tongguan and Baiyin were RMB 16,950-17,000/mt. As SHFE 1412 zinc contract prices fell to RMB 16,605/mt in the afternoon, spot discounts expanded to RMB 230-260/mt, with trading brisk.
Lead for November delivery on the Shanghai Futures Exchange, the most active contract, rose to RMB 13,980/mt during Thursday's night session, but later fell to end down RMB 20/mt at RMB 13,890/mt.
On Friday, SHFE lead initially dropped to RMB 13,815/mt, but later rebounded to RMB 13,880/mt before ending down RMB 105/mt at an intraday low of RMB 13,805/mt. Trading volumes for the SHFE 1411 lead contract totaled 2,472 lots, and positions shed 424 lots to 14,466 lots.
On the Shanghai physical lead market, Chihong Zn & Ge, Nanfang, and Chengyuan brands traded Friday at RMB 13,750/mt, a RMB 120-130/mt discount to the most active SHFE 1411 lead contract. Hanjiang and Humon brands were barely sold. Lead smelters remained disinclined to sell at low prices, with only Chihong Zn & Ge moving goods in light volumes. Traders held low inventories, and a small quantity of hedged goods flocked to the market. Downstream producers, with relatively sufficient raw material inventories, stayed on the sidelines after SHFE lead retreated. Trading activity slowed on Friday.
In Shanghai spot tin market, most deals closed between RMB 137,500-139,500/mt on Friday, unchanged from a day earlier. Buyers showed little interest out of pessimism. Some traders cut offers of Nanshan and Jinlong brand tin to RMB 137,000/mt. Supply of goods from Yunnan was tight.
SMM #1 nickel prices were between RMB 113,800-114,200/mt, with trading brisk and mainly among traders, and traded prices between RMB 113,800-114,400/mt. Spot nickel prices in Shanghai dropped with LME nickel prices in the afternoon, but transactions were actve, with traded prices between RMB 113,500-114,500/mt. Russian nickel prices were RMB 200-300/mt below Jinchuan nickel, with cargo holders unwilling to sell lower-priced goods. Jinchuan raised nickel prices by RMB 500/mt to RMB 114,500/mt, with demand soft.