SMM Base Metals Market Daily Review (2014-12-23)

SHANGHAI, Dec. 24 (SMM) –

Copper
Copper for March delivery on the Shanghai Futures Exchange, the most active contract, started Monday’s night session at RMB 45,890/mt and then tacked LME copper down to RMB 45,600/mt. The price of the SHFE 1503 copper contract rebounded slightly at the tail of the trading and closed down RMB 60/mt, or 0.13%, at RMB 45,700/mt. During the night session, positions for the most active contract gained 9,452 lots to 298,606 lots, while trading volumes totaled 100,052 lots.

SHFE copper initially rose to an intraday high of RMB 47,770/mt, but fell to RMB 45,560/mt afterwards before ending down RMB 130/mt, or 0.28%, at RMB 45,630/mt. Positions added 19,398 to 307,552 lots, and trading volumes increased over 25,000 lots. Positions for the SHFE 1502 copper contract shrank some 20,000. The price of the red metal confronts resistance at the 10-day and 20-day moving averages, but has found solid support at the 5-day moving average.

Spot copper in Shanghai was quoted Tuesday between a RMB 80/mt discount and a RMB 20/mt premium to the SHFE 1501 copper contract. Standard- and high-quality copper sold for RMB 46,380-46,540/mt and RMB 46,420-46,620/mt, respectively.

As SHFE copper hovered at lows, spot copper trading slowed on Tuesday, with prices quoted at a RMB 0-60/mt discount in the morning trading. Some speculative traders offered a higher discount to capitalize on a RMB 200/mt fall in SHFE copper by the midday. Standard-quality copper prices were quoted at a RMB 30-80/mt discount. Middlemen largely stayed out of the market, while some downstream producers bought as needed at low prices. Spot copper was quoted at a RMB 0-80/mt discount and traded at RMB 46,350-46,450/mt in the afternoon trading. Trading remained slow even though some downstream producers began to buy.

Aluminum
On Monday night, SHFE 1503 aluminum contract rose to RMB 13,330/mt before falling back to RMB 13,175/mt, and finished the night session at RMB 13,190/mt. Trading volumes totaled 10,158 lots, with positions up 490 lots to 125,448 lots.

On Tuesday, the most active contract climbed to RMB 13,230/mt before falling back to RMB 13,160/mt, and ended at RMB 13,165/mt. Trading volumes totaled 31,960 lots, with positions up 4,586 lots to 129,544 lots.

Spot aluminum largely traded between RMB 13,090-13,100/mt in Shanghai on Tuesday, premiums of RMB 0-10/mt over SHFE 1501 aluminum contract, versus RMB 13,080-13,090/mt in Wuxi, and RMB 13,110-13,120/mt in Hangzhou. SHFE 1501 aluminum contract retreated from RMB 13,100/mt, dampening buying interest in physical market. In the afternoon, markets turned quiet.

Lead
Lead for February delivery on the Shanghai Futures Exchange, the most active contract, slid to RMB 12,215/mt in Monday’s night session and ended down RMB 125/mt at RMB 12,360/mt. Trading volumes for the SHFE 1502 lead contract totaled 23,490 lots, while positions added 1,110 lots to 21,856 lots.

SHFE lead surged to RMB 12,440/mt at one point on Tuesday, but later trended down to finish down RMB 135/mt at RMB 12,350/mt. Trading volumes reached 33,082 lots, and positions shed 60 to 20,686.

Yuguang supplies in Shanghai were quoted Tuesday at RMB 12,620/mt, a RMB 320/mt premium to the SHFE 1501 lead contract. Chihong Zn & Ge was offered at RMB 12,620/mt, but traded lower at RMB 12,580/mt, a RMB 200/mt premium to the most active SHFE 1502 lead contract. Traded prices were RMB 12,550/mt for Humon and RMB 12,500-12,520/mt for Shuangyan. Smelters resumed sales slightly, while traders cut purchases sharply. Lead-acid battery producers reverted to a wait-and-see attitude after SHFE lead fell again on Tuesday, leaving trading light.

Zinc
SHFE 1502 zinc contract prices opened at RMB 16,350/mt Monday evening, and then hovered around RMB 16,300/mt, and closing at RMB 16,310/mt, up RMB 5/mt or 0.03%. Trading volumes decreased 18,496 to 63,060 lots, and total positions were down 5,390 to 112,418. SHFE 1502 zinc contract prices opened at RMB 16,310/mt on Tuesday, touching as high as RMB 16380/mt in the morning, then fluctuating between RMB 16,300-16,380/mt, and closing at RMB 16,370/mt, up RMB 65/mt or 0.4%. Trading volumes decreased 15,020 to 129,240 lots, and total positions decreased 11,046 to 106,762. Total positions of SHFE 1503 zinc contracts increased 22,516 to 92,206. SHFE 1502 zinc contract prices are expected to move around the 10-day moving average this evening.

#0 zinc prices were between RMB 16,600-16,680/mt, with spot premiums of RMB 240-310/mt against SHFE 1502 zinc contract prices. #1 zinc prices were between RMB 16,550-16,570/mt. Lida zinc supply remained limited, while Yongchang and Shuangyan zinc supply was ample. SHFE 1502 zinc contract prices inched up to RMB 16,360/mt after opening, up RMB 50/mt, with spot premiums firm between RMB 240-310/mt. Smelters have depleted stocks, and traders are also unwilling to sell, causing supply to decrease. Downstream buying interest was weak due to cash tightness. When combined with firm zinc prices, trading remained quiet. Shuangyan #0 zinc prices were RMB 16,660-16,680/mt, RMB 300-310/mt above SHFE 1502 zinc contract prices. Yuguang #0 zinc prices were RMB 16,650-16,660/mt, RMB 290-300/mt above SHFE 1502 zinc contract prices. Tiefeng, Qilin and Mengzi zinc prices were RMB 16,620-16,650/mt, with premiums of RMB 270-290/mt against SHFE 1502 zinc contract prices. Tianlu #0 zinc prices were RMB 16,600/mt, RMB 240-250/mt above SHFE 1502 zinc contract prices. Peruvian and Mexican #0 zinc prices were RMB 16,570-16,580/mt, RMB 200-220/mt above SHFE 1502 zinc contract prices. Supply improved due to inflow of imported zinc. SHFE 1502 zinc contract prices remained steady in the afternoon, with transactions lackluster.

Tin
In Shanghai spot tin market, mainstream traded prices lost as much as RMB 1,000/mt to RMB 126,500-130,000/mt on Tuesday, dragged down by sharply falling LME tin prices. Downstream producers stayed out of the market out of bearishness. Jinlong and Nanshan brand tin traded between RMB 126,500-127,000/mt, RMB 127,000-129,000/mt for Yunxiang and Yunheng brand tin, and RMB 130,000/mt for Yunxi brand tin.

Nickel
SMM #1 nickel prices were between RMB 109,700-110,100/mt. Spot nickel prices remained low in the morning, and downstream buyers watched on the sidelines, leaving trading muted, and with traded prices between RMB 109,800-110,200/mt. Prices stayed stable in the afternoon, with traders retreating, and traded prices between RMB 109,900-110,200/mt. Jinchuan raised nickel prices by RMB 300/mt to RMB 110,500/mt.