SHANGHAI, Oct. 16 (SMM) – SHFE 1412 copper contact prices gapped higher during night session Tuesday aided by rising LME copper, and kept climbing before meeting resistance at RMB 48,500/mt. The December-delivery copper finally closed the session up RMB 520/mt at RMB 48,420/mt with a session low of RMB 48,120/mt. Trading volumes of the most active contract rose to 210,000 lots, and positions increased 8,336 lots during the night session.
On October 15, worse-than-expected Chinese data drove the most active SHFE copper contract down to RMB 48,300/mt during day trading, with the contract for December delivery ending at RMB 48,330/mt, up RMB 430/mt, or 0.9%. Trading volumes of SHFE 1412 copper contract rose by 20,250 lots, while holdings increased 894 lots. Positions in SHFE 1510 copper contract soared by 11,486 lots. Investors were cautious as they saw limited room for prices to rise further.
Physical copper in Shanghai was offered at discounts of RMB 100-200/mt to the SHFE 1410 copper contract on October 15. Traded prices were RMB 48,680-48,780/mt for standard-quality copper and RMB 48,750-48,850/mt for high-quality copper.
SHFE copper prices dropped on Wednesday, while the price gap between SHFE 1410 and 1411 copper contracts expanded. Cargo holders’ eagerness to sell widened copper discounts, but trading was still light as downstream buyers were unwilling to purchase before expiration of the October copper and expected only a slight premiums after the delivery day.
As SHFE back-month copper contracts rebounded during the afternoon trading session, cargo holders became disinclined to sell, expecting prices to rise. This, combined with the slightly narrower price gap between the SHFE 1411 and 1412 copper contracts, saw a steep fall in physical supply. As a result, copper was mostly quoted between a RMB 80/mt discount and a RMB 40/mt premium. After the price gap expanded to RMB 300/mt at the tail of the trading, physical copper was quoted at a RMB 50-130/mt discount and traded at RMB 48,800-48,950/mt. Trading activity slowed on Wednesday.