SMM Base Metals Market Daily Review (2015-3-31)

SHANGHAI, Apr. 1 (SMM) – 

 

SHFE 1506 copper contract rallied to RMB 44,100/mt after opening Tuesday’s daytime trading, but pulled back following a wave of selling. The prices stabilized at RMB 43,700/mt before midday, but started falling again in the afternoon with Chinese stock prices tumbling more than 1%. The most active copper contract ended at RMB 43,350/mt, off by RMB 270/mt. Positions in the most active contract increased 13,290 to 383,528, while trading volumes shrank by 10,000 lots. Technically, copper prices should find support at RMB 43,000/mt.

 

Spot copper in Shanghai market quoted at discounts of RMB 80-130/mt to SHFE 1504 copper contract Tuesday morning, with standard-quality copper trading at RMB 43,570-43,650/mt and high-quality copper selling for RMB 43,590-43,700/mt.

 

Cargo holders quoted high early in the morning, and trading turn brisk for some time. Later, however, sellers moved goods aggressively after SHFE copper extended losses, expanding spot discounts.

 

Prices spread between standard and high-quality copper continued to narrow. Deals rarely entered the market, and downstream buyers only purchased as needed. Trading activities declined after increasing initially. Traded prices edged lower in the afternoon to RMB 42,720-43,700/mt. 

SHFE 1506 aluminum contract climbed to RMB 13,380/mt after starting Monday’s night session at RMB 13,315/mt as the Chinese government introduced favorable polices to shore up property market. The contract closed at RMB 13,375/mt. Trading volumes totaled 14,914 lots, with positions up 4,452 to 124,598. 

 

On Tuesday, June aluminum on the SHFE hit RMB 13,420/mt, its highest in over three months as investors continued to digest favorable policies in the housing market. Finally, the contract ended at RMB 13,370/mt. Trading volumes totaled 58,312 lots, with positions up 6,500 to 126,646. 

 

Spot aluminum largely traded between RMB 13,220-13,240/mt in Shanghai on Tuesday, discounts of RMB 160-180/mt over SHFE 1504 aluminum contract, versus RMB 13,210-13,230/mt in Wuxi, and RMB 13,260-13,270/mt in Hangzhou. SHFE 1504 aluminum contract touched its highest in over three months at RMB 13,420/mt, turning market players in physical market bullish. Traders stockpiled goods aggressively, pushing prices up. In the afternoon, sellers held back goods in hopes of higher prices, with few deals reported.  

SHFE 1506 lead contract prices rose RMB 10/mt Monday evening, while SHFE 1505 lead contract prices dropped RMB 15/mt. Trading volumes shrank for the sixth consecutive trading day, and total positions decreased for a 13th straight trading day.

 

The June delivery lead contract fell to RMB 12,370/mt after starting the daytime trading Tuesday, but rose back to RMB 12,450/mt after shorts liquidated positions. The prices then drifted lower again to end at RMB 12,360/mt, down by RMB 55/mt. Trading volumes were 1,552 lots, and positions increased 478 to 11,282. 

 

In spot lead market, Chihong Zn & Ge’s lead quoted at RMB 12,430-12,460/mt, premiums of RMB 30-50/mt to SHFE 1506 lead contract. Goods of Nanfang and Chengyuan were offered at discounts of RMB 10/mt to SHFE 1505 lead contract. Humon’s goods were offered at RMB 12,390-12,400/mt. Chihong Zn & Ge and Humon Smelting shipped out a few goods, but downstream buyers were uninterested in purchasing on the final trading day of the month. In Henan, spot lead still quoted at a discount of RMB 50/mt to SMM refined lead prices. 

SHFE 1506 zinc contract prices opened at RMB 16,030/mt Monday evening, then rose to RMB 16,090/mt, and closed the day at RMB 16,065/mt, up RMB 90/mt or 0.56%. Trading volumes increased 20,296 to 46,392 lots, and total positions were up 1,732 to 123,690. SHFE 1506 zinc contract prices opened at RMB 16,080/mt on Tuesday, then rolled back most early gains, and closed the day at RMB 15,985/mt, up RMB 10/mt or 0.06%. Trading volumes increased 37,558 to 115,234 lots, and total positions grew 2,594 to 124,552. SHFE 1506 zinc contract prices face downward pressure this evening.

 

#0 zinc prices were between RMB 15,910-15,940/mt, RMB 100-60/mt below SHFE 1505 zinc contract prices and RMB 130-90/mt below SHFE 1506 zinc contract prices. #1 zinc was traded between RMB 15,800-15,820/mt. SHFE 1506 zinc contract prices were up RMB 70/mt. Spot zinc prices, however, were weak, with spot discounts widening. Downstream buying interest was low due to quarter and month-end cash tightness, leaving overall transactions muted. Traders were also reticent. Shuangyan and Huize #0 zinc prices were RMB 15,930-15,940/mt, RMB 80-60/mt below SHFE 1505 zinc contract prices. Yuguang #0 zinc prices were RMB 15,920-15,930/mt, with spot discounts of RMB 90-60/mt against SHFE 1505 zinc contract prices. Qinxin and Qilin #0 zinc prices were RMB 15,900-15,910/mt, with spot discounts of RMB 100-80/mt against SHFE 1505 zinc contract prices. SMC #0 zinc prices were RMB 15,880-15,900/mt, with spot discounts of RMB 120/mt against SHFE 1505 zinc contract prices. Indian and Namibia’s #0 zinc prices were RMB 15,810-15,860/mt, with discounts of RMB 190-150/mt against SHFE 1505 zinc contract prices. SHFE 1506 zinc contract prices weakened in the afternoon. Shuangyan #0 zinc prices fell to as low as RMB 15,900/mt at one point, with discounts of RMB 90/mt against SHFE 1505 zinc contract prices, attracting some bargain hunters to enter the market.

 

In Shanghai spot tin market, mainstream traded prices fell further to RMB 117,500-120,000/mt on Tuesday, due to weakness in SHFE and LME tin, as well as slack downstream demand. Nanshan and Jinlong brand tin traded between RMB 117,300-117,500/mt, and RMB 118,500/mt for Yunheng brand tin, and RMB 119,200-119,800/mt for Yunxi brand tin. 

 

 Nickel   

SMM #1 nickel prices were between RMB 96,700-98,100/mt. Jinchuan nickel prices breached RMB 100,000/mt in the afternoon. When combined with a large inflow of imported nickel expected, trading muted, with traded prices between RMB 96,900-98,100/mt. Supply tightness eased in the afternoon due to shipments of Russian nickel arriving, allowing premiums on Jinchuan nickel to decrease. Nonetheless, discounts on Russian nickel over Jinchuan nickel expanded to RMB 1,500/mt. Downstream buying interest weakened on falling nickel prices on sluggish orders, with traded prices between RMB 96,500-98,200/mt.