SMM Base Metals Market Daily Review (2015-4-1)

SHANGHAI, Apr. 2 (SMM) – 

 

The SHFE copper for June delivery drifted higher to RMB 43,300/mt after starting Wednesday’s daytime trading powered by stronger China PMI data and touched RMB 43,500/mt in the morning. Later, the prices gave back some earlier gains and ended at RMB 43,260/mt, down RMB 510/mt. Positions in the most active contract increased 4,040 to 387,568, while trading volumes shrank by 14,000 lots. Iron ore and rebar prices continued to fall despite stimulus polices, suggesting that expectation for the peak demand season has been priced in.

 

Spot copper in Shanghai market quoted at discounts of RMB 0-90/mt to SHFE 1504 copper contract Wednesday morning, with standard-quality copper trading at RMB 43,340-43,460/mt and high-quality copper selling for RMB 43,360-43,480/mt.

 

Cargo holders offered high prices early today, and many dealers sourced goods in the market after SHFE copper rallied, allowing spot discounts to narrow quickly. High-quality copper was offered virtually on par with SHFE 1504 copper contract prices near midday. However, trading activities declined later. Downstream buyers mostly held on the sidelines.  

Aluminum      

SHFE 1506 aluminum contract inched up after starting Tuesday’s night session at RMB 13,360/mt, and closed at RMB 13,370/mt. Trading volumes totaled 11,294 lots, with positions down 50 to 126,596. 

 

China’s official manufacturing PMI was 50.1 in March, beating expectations. HSBC’s China manufacturing PMI for March was 49.6, but this had little impact on SHFE aluminum. June aluminum on the SHFE rose to RMB 13,405/mt on Wednesday, but pared gains later, ending at RMB 13,370/mt. Trading volumes totaled 25,522 lots, with positions down 1,246 to 125,400. 

 

Spot aluminum largely traded between RMB 13,250-13,260/mt in Shanghai on Wednesday, discounts of RMB 130-140/mt over SHFE 1504 aluminum contract, versus RMB 13,230-13,250/mt in Wuxi, and RMB 13,290-13,300/mt in Hangzhou. Limited supply in Shanghai allowed local suppliers to hold offers firm. Hedged goods flowed in due to narrowing spot discounts in Wuxi. Traders in Wuxi were cautious about buying, while local processors bought only to need. In the afternoon, few deals were reported.  

SHFE 1506 lead contract prices rose on Wednesday thanks to positive PMI data for China, and closed up RMB 45/mt at RMB 12,440/mt. Trading volumes were 1,858 lots, and positions rose by 452 to 11,734. 

 

In spot lead market, Chihong Zn & Ge’s lead quoted at RMB 12,450/mt, a premium of RMB 60/mt to SHFE 1506 lead contract. Goods of Nanfang and Chengyuan were offered at discounts RMB 12,400-12,410/mt. Humon’s goods were offered at RMB 12,390-12,400/mt. Smelters still ship out goods in limited amounts, and some downstream buyers started building stocks for the Tomb Sweeping Day holiday (Apr.4-6). 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 15,975/mt Tuesday evening, then fluctuated between RMB 15,910-15,980/mt, and closed the day at RMB 15,920/mt, down RMB 120/mt or 0.75%. SHFE 1506 zinc contract prices opened at RMB 15,925/mt on Wednesday. China’s official PMI in March returned to a growth territory, but the market received little boost. As LME zinc prices rose, SHFE 1506 zinc contract prices surged to RMB 16,025/mt, then fell back and closed the day at RMB 15,975/mt, down RMB 65/mt or 0.41%. Trading volumes decreased 29,610 to 85,624 lots, and total positions grew 1,948 to 126,500. SHFE 1506 zinc contract prices are expected to remain steady this evening.

 

#0 zinc prices were between RMB 15,840-15,870/mt, RMB 120-90/mt below SHFE 1506 zinc contract prices and RMB 130-90/mt below SHFE 1506 zinc contract prices. #1 zinc was traded between RMB 15,750-15,760/mt. SHFE 1506 zinc contract prices were down RMB 90/mt. Spot trading improved some, causing spot discounts to narrow and price spread to contract. Some cargo holders sold modestly, and traders purchased at lower prices, with spot supply decreasing. Spot discounts narrowed from RMB 120/mt to RMB 100/mt. Downstream buying interest improved due to easing cash tightness. Shihong #0 zinc prices were RMB 15,860-15,880/mt, RMB 90-70/mt below SHFE 1506 zinc contract prices. Shuangyan #0 zinc prices were RMB 15,850-15,870/mt, RMB 100-90/mt below SHFE 1506 zinc contract prices. Yuguang #0 zinc prices were RMB 15,850-15,860/mt, with spot discounts of RMB 100/mt against SHFE 1506 zinc contract prices. Qinxin and Qilin #0 zinc prices were RMB 15,840-15,850/mt, with spot discounts of RMB 120-100/mt against SHFE 1506 zinc contract prices. SMC #0 zinc prices were RMB 15,820-15,840/mt, with spot discounts of RMB 130-100/mt against SHFE 1506 zinc contract prices. YP #0 zinc prices were RMB 15,790-15,800/mt, with spot discounts of RMB 160/mt against SHFE 1506 zinc contract prices. Indian #0 zinc prices were RMB 15,750-15,760/mt, with discounts of RMB 190/mt against SHFE 1506 zinc contract prices. SHFE 1506 zinc contract prices fluctuated around RMB 15,950/mt in the afternoon, and up at the end of trading, with discounts expanding RMB 30/mt against SHFE 1506 zinc contract prices.

In Shanghai spot tin market, trading remained thin on Wednesday as falling prices kept buyers cautious. Mainstream traded prices fell further to RMB 117,000-119,500/mt. Nanshan brand tin traded between RMB 117,000-117,500/mt, and RMB 119,000/mt for Yunheng brand tin, and RMB 119,000-119,500/mt for Yunxi brand tin.

SMM #1 nickel prices were between RMB 95,000-97,000/mt. Despite slumping LME nickel prices overnight, spot nickel prices in Shanghai remained firm. Jinchuan Group left nickel prices unchanged, with trading brisk and traded prices between RMB 95,000-96,500/mt. Spot nickel prices remained stable in the afternoon. Traders sold imported nickel actively whilst holding back Jinchuan nickel, with traded prices between RMB 95,000-96,300/mt.