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SMM Base Metals Market Daily Review (2014-10-22)
Oct 24,2014 09:12CST
price review forecast
The most active SHFE 1412 copper contract started Tuesday’s night session at RMB 47,100/mt, and then surged to RMB 47,330/mt before falling back to end up RMB 530/mt at RMB 47,060/mt.

SHANGHAI, Oct. 24 (SMM) –

The most active SHFE 1412 copper contract started Tuesday’s night session at RMB 47,100/mt, and then surged to RMB 47,330/mt before falling back to end up RMB 530/mt at RMB 47,060/mt. Trading volumes for the most active contract totaled about 160,000 lots, and positions shrank by 3,836 lots.

SHFE copper initially struggled under RMB 47,200/mt, and slipped to RMB 46,930/mt before finishing up RMB 430/mt, or 0.92%, at RMB 47,070/mt. Trading volumes for the SHFE 1412 copper contract gained by 58,434 lots, and positions added by 10,154 lots.

Physical copper in Shanghai was quoted Wednesday at a RMB 60-130/mt premium to the SHFE 1411 copper contract. Traded prices were RMB 47,900-47,980/mt for standard-quality copper and RMB 47,940-48,040/mt for high-quality copper. As SHFE copper weakened on Wednesday, cargo holders continued moving goods steadily, with a variety of copper brands found in the market. The price of low-quality hydro-copper held firm due to tight supply. Middlemen slowed operations, while downstream producers bought only on an as-needed basis, leaving trading activity worse than Tuesday.

As SHFE copper fell during the afternoon trading session, physical copper was quoted at a RMB 50-120/mt premium and traded lower at RMB 47,830-48,000/mt. Supply was abundant on Wednesday since cargo holders grew more willing to sell, but trading activity slowed.

On Tuesday night, SHFE 1412 aluminum contract started at RMB 13,835/mt, and finished the night session at RMB 13,810/mt. Trading volumes totaled 30,724 lots, with positions down 1,124 lots to 113,784 lots.

On Wednesday, the most active contract fell further to RMB 13,680/mt before closing at RMB 13,755/mt. Trading volumes totaled 53,956 lots, with positions down 10,154 lots to 103,630 lots. Prices may extend losses since bearish sentiment is running wild.

Spot aluminum largely traded at RMB 13,610-13,620/mt in Shanghai on Wednesday, discounts of RMB 60-100/mt over SHFE 1411 aluminum contract, versus RMB 13,610-13,630/mt in Wuxi and RMB 13,630-13,640/mt in Hangzhou. Sellers rushed to sell out of growing pessimism after SHFE aluminum moved lower, but buyers generally stayed out of the market. In the afternoon, some raised offers slightly to RMB 13,630/mt after SHFE front-month contract rallied. But few transactions were reported.

Lead for December delivery on the Shanghai Futures Exchange, the most active contract, opened Tuesday’s night session at RMB 13,670/mt, and followed LME lead up as high as RMB 13,760/mt subsequently. The price of the SHFE 1412 lead contract ended up only RMB 25/mt at RMB 13,655/mt due to increased selling force.

SHFE lead hovered initially at RMB 13,600-13,640/mt on Wednesday, and closed up RMB 5/mt at RMB 13,635/mt. Positions for the SHFE 1412 lead contract shrank 462 lots to 9,882 lots.

Chihong Zn & Ge, Nanfang, Chengyuan, and Tongguan brands in Shanghai traded Wednesday at RMB 13,650-13,660/mt, an about RMB 20/mt premium to the most active SHFE 1412 lead contract. Traded prices were RMB 13,640-13,650/mt for Humon and Hanjiang brands. Pressured by tightening cash flows at the end of October, Chihong Zn & Ge, Nanfang, Hanjiang, and Humon moved goods, helping increase supply. Traders were buying actively to replenish stocks. Lead-acid battery producers, however, slashed purchases on Wednesday due to sufficient raw material inventories and bearish outlook towards lead prices.

SHFE 1412 zinc contract prices opened at RMB 16,250/mt Tuesday evening, then edged up with LME zinc prices, touching as high as RMB 16,380/mt, and closed at RMB 16,360/mt, up RMB 150/mt or 0.93%. Trading volumes increased 14,360 to 234,700 lots, and total positions increased 142 to 142,072 lots. SHFE 1412 zinc contract prices opened at RMB 16,355/mt October 22, then rolled back some gains due to the exodus of longs, then hovered between RMB 16,300-16,340/mt. LME zinc prices leapt before the end of trading, but SHFE 1412 zinc contract price gains were extremely limited, and closed at RMB 16,355/mt, up RMB 145/mt or 0.89%. Trading volumes decreased 35,380, to 346,806 lots, and total positions were down 9,110 lots to 132,820 lots. SHFE 1412 zinc contract prices are expected to rebound.

#0 zinc prices were between RMB 16,620-16,660/mt, with spot premiums of RMB 320-350/mt against SHFE 1412 zinc contract prices. #1 zinc prices were between RMB 16,570-16,600/mt, with the price spread between #1 and #0 zinc narrowing to RMB 50-60/mt. SHFE 1412 zinc contract prices fell to RMB 16,310/mt after opening, but were still up RMB 70-80/mt from the previous trading day. Smelters increased sales selling on falling prices, but #0 zinc supply was limited. This allowed cargo holders to hold prices firm, quoting Shuangyan zinc prices as high as RMB 360/mt above SHFE 1412 zinc contract prices. But large inflows of imported zinc helped ease supply tightness, with Belgian #0 zinc prices between RMB 16,620-16,630/mt. Investors were unwilling to purchase on high premiums. Shuangyan branded #0 zinc prices were RMB 16,640-16,660/mt, and prices for Yuguang and Hongda zinc were RMB 16,630-16,650/mt. Baiyin, Qilin, and Jiulong zinc prices were RMB 16,630-16,640/mt. SHFE 1412 zinc contract prices consolidated in the afternoon, with trading muted.

In Shanghai spot tin market, prices extended losses due to the inflow of imported tin. Most deals closed between RMB 134,500-137,500/mt on Wednesday, down another RMB 500/mt. Low prices enticed downstream producers to go bargain hunting. Nanshan and Jinlong brand tin traded at RMB 134,500/mt, while goods from Yunnan traded between RMB 134,500-135,500/mt. Leading brand goods traded between RMB 137,000-137,500/mt due to tight supply.

SMM #1 nickel prices were between RMB 103,700-104,100/mt. LME nickel prices failed to break through RMB 15,000/mt, but cargo holders were not pessimistic toward the market. Spot supply increased as arbitrage traders sold actively, with quotes RMB 200-100/mt below 1411 nickel contract prices on the Wuxi electronics trading, between RMB 103,800-104,200/mt. Spot price volatility was up in the afternoon, leaving trading brisk, with traded prices between RMB 103,800-104,700/mt. Jinchuan left nickel prices unchanged at RMB 103,700/mt, with downstream purchasing actively.

SHFE copper prices
SHFE aluminum prices
SHFE lead prices
SHFE zinc prices
Shanghai tin prices
Shanghai nickel prices

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