SMM Base Metals Market Daily Review (2015-3-18)

SHANGHAI, Mar. 19 (SMM) –

Copper
SHFE most active copper contract hit a high of RMB 42,400/mt after starting Wednesday’s daytime trading, but slipped below RMB 42,100/mt in the afternoon, and fell more sharply at the tail of trading due to selling pressure. The May delivery copper closed at RMB 41,620/mt, posting a decline of RMB 1,030/mt.

Positions in SHFE 1505 copper contract fell by 1,760 and trading volumes were around 180,000 lots.

Shanghai market witnessed spot discounts of RMB 90-160/mt for copper early Wednesday, with standard-quality copper trading at RMB 42,000-42,220/mt and high-quality production selling for RMB 42,020-42,280/mt. Cargo holders sold actively against weak SHFE copper, expanding spot discounts. Some traders gaining from futures market sell at large discounts in spot market. Downstream producers seldom entered market.

In the afternoon, hedged goods continued to flow into spot market in the wake of a slump in SHFE copper. Traded prices fell to RMB 41,700-41,800/mt.

Aluminum
SHFE 1505 aluminum contract rose to RMB 13,145/mt after starting Tuesday’s night session at RMB 13,080/mt, and ended at RMB 13,115/mt. Trading volumes totaled 10,370 lots, with positions down 382 to 112,766.

On Wednesday, May aluminum on the SHFE rose to RMB 13,160/mt before ending at RMB 13,140/mt. Trading volumes totaled 29,222 lots, with positions down 2,964 to 110,184. Technical side looks positive for the most active contract.

Spot aluminum largely traded between RMB 12,870-12,890/mt in Shanghai on Wednesday, discounts of RMB 230-250/mt over SHFE 1503 aluminum contract, versus RMB 12,860-12,880/mt in Wuxi, and RMB 12,880-12,900/mt in Hangzhou. Growing spot discounts widened the room for arbitrage, luring traders in. Processors bought only to need. In the afternoon, trading was light.

Lead
The most active SHFE lead contract prices gapped lower at RMB 12,115/mt during Tuesday’s night session and stayed between RMB 12,100-12,140/mt before closing at RMB 12,140/mt.

The May-delivery lead rose to RMB 12,185/mt briefly after opening on Wednesday, but dropped later on a wave of selloff and finished the daytime trading at RMB 12,085/mt, down by RMB 125/mt. Trading volumes were 3628 lots, and positions declined 498 to 15,682.

Goods of Chihong Zn & Ge was offered at RMB 12,300-12,320/mt, a premium of RMB 140/mt to SHFE 1505 lead contract prices. Chengyuan and Nanfang were quoted at RMB 12,280-12,290/mt. Humon and Shuangyan brands were quoted at RMB 12,270/mt and RMB 12,250/mt, respectively. Trading in spot lead market was enlivened with hedged goods entering market and downstream producers buying on dips. Prices were RMB 12,200-12,220/mt in Henan.

Zinc
SHFE 1505 zinc contract rose to RMB 15,800/mt after starting Tuesday’s night session at RMB 15,765/mt. But the most active contract fell to RMB 15,750/mt later before ending down RMB 20/mt or 0.13% at RMB 15,735/mt. Trading volumes were up 3,610 lots to 40,000 lots, with positions up 1,402 to 165,680.

On Wednesday, May zinc on the SHFE climbed to 15,710/mt after opening at RMB 15,670/mt. But the contract fell back later to end RMB 115/mt or 0.73% lower at RMB 15,615/mt. Trading volumes shrank 26,502 lots to 69,740 lots, with positions down 4,480 to 158,680.

#0 zinc traded between RMB 15,650-15,680/mt on Wednesday, discounts of RMB 10-40/mt over SHFE 1505 zinc contract. #1 zinc traded at RMB 15,600/mt. Smelters remained eager to sell, but traders held back goods at lows, allowing spot discounts for some brands to shrink RMB 10-20/mt. Downstream buyers generally held to the sidelines, with a few buying to need. Shuangyan #0 zinc traded between RMB 15,670-15,680/mt, discounts of RMB 20-10/mt over SHFE 1505 zinc contract; Yuguang #0 zinc traded between RMB 15,680-15,690/mt, discounts of RMB 30-20/mt; Qinxin and Qilin #0 zinc traded between RMB 15,650-15,660/mt, discounts of RMB 40-30/mt; SMC and KZ #0 zinc prices were RMB 15,630-15,640/mt, discounts of RMB 60-50/mt; Indian and Peru #0 zinc prices were RMB 15,570-15,580/mt, discounts of RMB 110-90/mt. In the afternoon, falling SHFe zinc allowed discounts of #0 zinc to narrow to RMB 30-10/mt. Trading was thin.

Tin
In Shanghai spot tin market, processors and traders showed little buying interest as falling LME tin prices turned them bearish. Mainstream traded prices were RMB 120,000-124,000/mt on Wednesday. Some deals closed as low as RMB 119,500/mt.

Nickel
SMM #1 refined nickel prices in Shanghai were RMB 103,000-103,800/mt on March 18. Spot prices bounced back following a brief slide in the morning. Transactions increased with imported nickel quickly sold after being released. Traded prices were RMB 103,100-103,800/mt. Ub the afternoon, spot prices declined again due to lower LME nickel, but the premiums over 1504 contract on China Stainless Steel Exchange hit a 2015 high of RMB 2,000/mt. Traded prices were RMB 102,700-103,400/mt in the afternoon.