SMM Copper Market Daily Review (2014-10-28)

SHANGHAI, Oct. 29 (SMM) – The most active SHFE 1501 copper contract started Monday’s night session at RMB 47,450/mt, and then slid to end up RMB 120/mt at RMB 47,310/mt. During the night session, trading volumes for the most active contract totaled some 110,000 lots, and positions gained by 6,354 lots.

On Tuesday, SHFE copper initially hovered around RMB 47,470/mt, and advanced to an intraday high of RMB 47,580/mt at the tail of the trading before finishing up RMB 350/mt at RMB 47,540/mt. Trading volumes for the SHFE 1501 copper contract shed by 4,656 lots, and positions added by 1,550 lots.

Physical copper in Shanghai was quoted Tuesday at a RMB 20-100/mt discount to the SHFE 1411 copper contract. Traded prices were RMB 48,100-48,160/mt for standard-quality copper and RMB 48,140-48,200/mt for high-quality copper.

As SHFE copper rose sharply on Tuesday, cargo holders stepped up selling to increase cash flows. High-quality copper was sold at a broader discount, and standard-quality and hydro-copper followed suit. Trading activity, however, remained light since market participants considered the price rebound short-lived. Middlemen stayed largely out of the market due to liquidity shortfalls, while downstream producers were reluctant to buy in late October.

As SHFE copper rose further during the afternoon trading session, physical copper was quoted at a RMB 20-70/mt discount and traded at RMB 48,150-48,250/mt. Trading activity was light on Tuesday, with only a small number of middlemen buying high-quality copper at low prices.