SMM Copper Market Daily Review (2015-1-14)

SHANGHAI, Jan. 15 (SMM) – Copper for March delivery on the Shanghai Futures Exchange, the most active contract, swung by less than RMB 200/mt after starting Tuesday’s night session at RMB 42,300/mt. The price of the SHFE 1503 copper contract closed down RMB 800/mt at RMB 42,560/mt. During the night session, trading volumes for the most active contract rose to over 210,000 lots, while positions shed by 8,836.

SHFE copper plunged in tandem with LME copper to finish down RMB 2,170/mt, or 5% at RMB 41,190/mt. Trading volumes for the most active contract gained by 4,466 lots, while positions decreased by 5,862.

Spot copper in Shanghai was quoted Wednesday at a RMB 700-1,400/mt discount to the SHFE 1501 copper contract. Standard- and high-quality copper sold for RMB 40,670-41,070/mt and RMB 40,870-41,370/mt, respectively.

Copper quotations were varied at some stage early on Wednesday as LME copper fell below USD 5,500/mt and SHFE copper dropped by the daily trading limit across the board. The tumble in LME copper sent the SHFE/LME copper price ratio above 7.6. Some cargo holders responded by raising discounts to RMB 1,000-1,500/mt to boost sales, but downstream producers were reluctant to buy out of fear that copper prices will fall further. Some went bargain-hunting as LME copper leveled out to hover around USD 5,500/mt by the midday. As a result, trading improved, while spot discounts narrowed to RMB 700-1,200/mt. Spot copper was offered at a RMB 1,000-1,300/mt discount and traded at RMB 40,770-41,070/mt in afternoon trading.