SMM Base Metals Market Daily Review (2014-11-26)-Shanghai Metals Market

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SMM Base Metals Market Daily Review (2014-11-26)

Price Review & Forecast 11:35:07AM Nov 27, 2014 Source:SMM

SHANGHAI, Nov. 27 (SMM) –

Copper
Copper for February delivery on the Shanghai Futures Exchange, the most active contract, sank to RMB 46,810/mt in Tuesday’s night session after starting at RMB 47,340/mt, and ended down RMB 410/mt at RMB 46,910/mt. During the night session, trading volumes for the SHFE 1502 copper contract edged up to some 130,000 lots, while positions surged by 11,820 lots.

SHFE copper fell further to RMB 46,560/mt on Wednesday and finished down RMB 730/mt, or 1.54%, at RMB 46,590/mt. Trading volumes for the most active contract spiked by 289,000 lots, and positions added by 84,494 lots. Trading volumes for the SHFE 1503 copper contract expanded by 64,422 lots, and positions increased by 23,872 lots. The price of the red metal is expected to fall further into the near future due to negative technical indicators. The SHFE announced Tuesday that it will halve the service charge for copper futures transaction from November 26, 2014 to March 31, 2015.

Spot copper in Shanghai was quoted Wednesday at a RMB 70-150/mt premium to the SHFE 1412 copper contract. Standard- and high-quality copper sold for RMB 47,650-47,750/mt and RMB 47,670-47,830/mt, respectively.

As SHFE copper extended losses, some hedged goods flowed into the market. Speculative traders went bargain-hunting on Wednesday, which led to a decline in low-priced goods and in turn drove spot premiums up. Standard-quality and hydro copper gained favor with buyers, allowing their prices to draw closer to the price of high-quality copper. Middlemen became more active, while downstream producers ramped up purchases at low prices.

Spot copper was quoted at a RMB 100-130/mt premium and traded lower at RMB 47,520-47,650/mt during the afternoon trading session.

Aluminium
On Tuesday night, SHFE 1501 aluminum contract sank to RMB 13,670/mt after starting at RMB 13,820/mt, and finished the night session at RMB 13,735/mt. Trading volumes totaled 19,982 lots, with positions up 68 lots to 113,350 lots.

On Wednesday, the most active contract climbed to RMB 13,850/mt in the morning, but fell back in the afternoon as investors closed long positions. The contract ended at RMB 13,765/mt. Trading volumes totaled 47,828 lots, with positions down 8,238 lots to 105,044 lots. Positions of SHFE 1502 aluminum contract surged 1,102 lots to 104,118 lots. As such, SHFE 1502 aluminum contract may become the most active one today.

Spot aluminum largely traded at RMB 13,700-13,710/mt in Shanghai and Wuxi on Wednesday, discounts of RMB 40-50/mt over SHFE 1412 aluminum contract, versus RMB 13,750-13,760/mt in Hangzhou. Sellers in physical market demanded higher prices now that SHFE front-month contract has moved higher, cooling downstream buying. In the afternoon, sellers held offers around RMB 13,710/mt, with a few transactions reported.

Lead
Lead for January delivery on the Shanghai Futures Exchange, the most active contract, surged to RMB 13,680/mt in Tuesday’s night session after opening at RMB 13,600/mt, and ended flat at RMB 13,600/mt.

In contrast with a decline in SHFE copper and zinc, SHFE lead rose to RMB 13,630/mt on Wednesday, boosted by shorts liquidating positions. The price of the soft metal, however, fell subsequently to close down RMB 25/mt at RMB 13,595/mt. Trading volumes totaled 1,890 lots, while positions shed 312 lots to 13,172 lots.

Supplies from Chihong Zn & Ge in Shanghai traded Wednesday at RMB 13,510-13,520/mt, around an RMB 80/mt discount to the most active SHFE 1501 lead contract. Traded prices were RMB 13,500/mt for Nanfang, Humon, and Hanjiang brands. Overall supply from smelters increased as Chihong Zn & Ge and Hanjiang both moved goods. Nevertheless, downstream producers turned less willing to buy due to a fall in SHFE lead and tight liquidity at the end of November, leading to light trading on Wednesday.

Zinc
SHFE 1501 zinc contract prices opened higher at RMB 17,060/mt last Friday evening, then inched lower to USD 17,000/mt, and closing at RMB 16,955/mt, up RMB 195/mt or 1.16%. Trading volumes increased 126,528 to 243,234 lots, and total positions were up 5,266 to 185,722 lots. SHFE 1501 zinc contract prices opened at RMB 16,955/mt Monday, then fluctuated between RMB 16,840-16,940/mt during the day, and closing at RMB 16,875/mt, up RMB 115/mt or 0.69%. Trading volumes decreased 12,588 to 167,868 lots, and total positions increased 78,412 to 402,994 lots. SHFE 1501 zinc contract prices are expected to test support from RMB 16,800/mt this evening.

#0 zinc prices were between RMB 16,970-17,060/mt, with spot premiums of RMB 120-210/mt against SHFE 1501 zinc contract prices. #1 zinc prices were between RMB 16,900-16,920/mt, RMB 80-100/mt above SHFE 1501 zinc contract prices. SHFE 1501 zinc contract prices fell to RMB 16,840-16,850/mt after opening, down RMB 10-20/mt from the previous trading day. Spot premiums dropped as smelters are looking to convert inventories to cash. Arbitrage traders moved goods actively, leading to ample supply. But some traders busing with settling are unwilling to purchase due to weakening spot premiums, and downstream buying interest did not improve, either, leaving overall transactions muted. Shuangyan #0 zinc prices were RMB 17,040-17,060/mt. Yuguang #0 zinc prices were RMB 17,020-17,040/mt. Qinxin, Jiulong, and Shuikoushan zinc prices were RMB 16,990-17,010/mt. Tiefeng and Baiyin zinc prices were RMB 16,970-16,990/mt. SHFE 1501 zinc prices inched down in the afternoon, but spot premiums stayed between RMB 130-210/mt. Transactions muted.

Tin
In Shanghai spot tin market, mainstream traded prices remained stable between RMB 133,500-136,500/mt on Wednesday. Low availability of cheap goods dampened trading activity. Nanshan and Yunxiang brand tin traded between RMB 133,500-133,800/mt and RMB 134,300-134,500/mt, respectively. Holders of goods from Yunnan held offers firm between RMB 135,500-136,500/mt.

Nickel
SMM #1 nickel prices were between RMB 112,400-112,800/mt, with transactions muted in the morning and traded prices between RMB 111,700-112,100/mt, falling to RMB 111,400-111,800/mt in the afternoon. Overall trading was quiet. Jinchuan lowered prices RMB 500/mt to RMB 112,500/mt.

 

SMM Base Metals Market Daily Review (2014-11-26)

Price Review & Forecast 11:35:07AM Nov 27, 2014 Source:SMM

SHANGHAI, Nov. 27 (SMM) –

Copper
Copper for February delivery on the Shanghai Futures Exchange, the most active contract, sank to RMB 46,810/mt in Tuesday’s night session after starting at RMB 47,340/mt, and ended down RMB 410/mt at RMB 46,910/mt. During the night session, trading volumes for the SHFE 1502 copper contract edged up to some 130,000 lots, while positions surged by 11,820 lots.

SHFE copper fell further to RMB 46,560/mt on Wednesday and finished down RMB 730/mt, or 1.54%, at RMB 46,590/mt. Trading volumes for the most active contract spiked by 289,000 lots, and positions added by 84,494 lots. Trading volumes for the SHFE 1503 copper contract expanded by 64,422 lots, and positions increased by 23,872 lots. The price of the red metal is expected to fall further into the near future due to negative technical indicators. The SHFE announced Tuesday that it will halve the service charge for copper futures transaction from November 26, 2014 to March 31, 2015.

Spot copper in Shanghai was quoted Wednesday at a RMB 70-150/mt premium to the SHFE 1412 copper contract. Standard- and high-quality copper sold for RMB 47,650-47,750/mt and RMB 47,670-47,830/mt, respectively.

As SHFE copper extended losses, some hedged goods flowed into the market. Speculative traders went bargain-hunting on Wednesday, which led to a decline in low-priced goods and in turn drove spot premiums up. Standard-quality and hydro copper gained favor with buyers, allowing their prices to draw closer to the price of high-quality copper. Middlemen became more active, while downstream producers ramped up purchases at low prices.

Spot copper was quoted at a RMB 100-130/mt premium and traded lower at RMB 47,520-47,650/mt during the afternoon trading session.

Aluminium
On Tuesday night, SHFE 1501 aluminum contract sank to RMB 13,670/mt after starting at RMB 13,820/mt, and finished the night session at RMB 13,735/mt. Trading volumes totaled 19,982 lots, with positions up 68 lots to 113,350 lots.

On Wednesday, the most active contract climbed to RMB 13,850/mt in the morning, but fell back in the afternoon as investors closed long positions. The contract ended at RMB 13,765/mt. Trading volumes totaled 47,828 lots, with positions down 8,238 lots to 105,044 lots. Positions of SHFE 1502 aluminum contract surged 1,102 lots to 104,118 lots. As such, SHFE 1502 aluminum contract may become the most active one today.

Spot aluminum largely traded at RMB 13,700-13,710/mt in Shanghai and Wuxi on Wednesday, discounts of RMB 40-50/mt over SHFE 1412 aluminum contract, versus RMB 13,750-13,760/mt in Hangzhou. Sellers in physical market demanded higher prices now that SHFE front-month contract has moved higher, cooling downstream buying. In the afternoon, sellers held offers around RMB 13,710/mt, with a few transactions reported.

Lead
Lead for January delivery on the Shanghai Futures Exchange, the most active contract, surged to RMB 13,680/mt in Tuesday’s night session after opening at RMB 13,600/mt, and ended flat at RMB 13,600/mt.

In contrast with a decline in SHFE copper and zinc, SHFE lead rose to RMB 13,630/mt on Wednesday, boosted by shorts liquidating positions. The price of the soft metal, however, fell subsequently to close down RMB 25/mt at RMB 13,595/mt. Trading volumes totaled 1,890 lots, while positions shed 312 lots to 13,172 lots.

Supplies from Chihong Zn & Ge in Shanghai traded Wednesday at RMB 13,510-13,520/mt, around an RMB 80/mt discount to the most active SHFE 1501 lead contract. Traded prices were RMB 13,500/mt for Nanfang, Humon, and Hanjiang brands. Overall supply from smelters increased as Chihong Zn & Ge and Hanjiang both moved goods. Nevertheless, downstream producers turned less willing to buy due to a fall in SHFE lead and tight liquidity at the end of November, leading to light trading on Wednesday.

Zinc
SHFE 1501 zinc contract prices opened higher at RMB 17,060/mt last Friday evening, then inched lower to USD 17,000/mt, and closing at RMB 16,955/mt, up RMB 195/mt or 1.16%. Trading volumes increased 126,528 to 243,234 lots, and total positions were up 5,266 to 185,722 lots. SHFE 1501 zinc contract prices opened at RMB 16,955/mt Monday, then fluctuated between RMB 16,840-16,940/mt during the day, and closing at RMB 16,875/mt, up RMB 115/mt or 0.69%. Trading volumes decreased 12,588 to 167,868 lots, and total positions increased 78,412 to 402,994 lots. SHFE 1501 zinc contract prices are expected to test support from RMB 16,800/mt this evening.

#0 zinc prices were between RMB 16,970-17,060/mt, with spot premiums of RMB 120-210/mt against SHFE 1501 zinc contract prices. #1 zinc prices were between RMB 16,900-16,920/mt, RMB 80-100/mt above SHFE 1501 zinc contract prices. SHFE 1501 zinc contract prices fell to RMB 16,840-16,850/mt after opening, down RMB 10-20/mt from the previous trading day. Spot premiums dropped as smelters are looking to convert inventories to cash. Arbitrage traders moved goods actively, leading to ample supply. But some traders busing with settling are unwilling to purchase due to weakening spot premiums, and downstream buying interest did not improve, either, leaving overall transactions muted. Shuangyan #0 zinc prices were RMB 17,040-17,060/mt. Yuguang #0 zinc prices were RMB 17,020-17,040/mt. Qinxin, Jiulong, and Shuikoushan zinc prices were RMB 16,990-17,010/mt. Tiefeng and Baiyin zinc prices were RMB 16,970-16,990/mt. SHFE 1501 zinc prices inched down in the afternoon, but spot premiums stayed between RMB 130-210/mt. Transactions muted.

Tin
In Shanghai spot tin market, mainstream traded prices remained stable between RMB 133,500-136,500/mt on Wednesday. Low availability of cheap goods dampened trading activity. Nanshan and Yunxiang brand tin traded between RMB 133,500-133,800/mt and RMB 134,300-134,500/mt, respectively. Holders of goods from Yunnan held offers firm between RMB 135,500-136,500/mt.

Nickel
SMM #1 nickel prices were between RMB 112,400-112,800/mt, with transactions muted in the morning and traded prices between RMB 111,700-112,100/mt, falling to RMB 111,400-111,800/mt in the afternoon. Overall trading was quiet. Jinchuan lowered prices RMB 500/mt to RMB 112,500/mt.