SMM Base Metals Market Daily Review (2015-4-8)

SHANGHAI, Apr. 9 (SMM) –
Copper
SHFE 1506 copper contract gapped higher at RMB 43,550/mt during night session Tuesday, and touched a high of RMB 43,820/mt before ending at RMB 43,700/mt, up RMB 250/mt. Positions fell by 1,796 and trading volumes were around 130,000 lots.

The most active SHFE copper contract declined soon after starting on Wednesday, and touched a low of RMB 43,360/mt. In the afternoon, the red metal rallied to RMB 43,500/mt with Chinese stocks approaching 4,000, and closed the daytime trading at RMB 43,460/mt. Positions in the most active contract fell by 3,246, and trading volumes increased 156,000 lots.

Spot copper in Shanghai market quoted at premiums of RMB 30-60/mt to SHFE 1504 copper contract Wednesday morning. Prices are RMB 43,520-43,620/mt for standard-quality copper and RMB 43,540-43,640/mt for high-quality copper.

Trading activities declined in copper market with caution looming. A few traders continued to source goods in the market. Quotations for hydro-copper were rarely heard, while price offers for standard-quality copper moved higher. Downstream producers mostly watched from the sidelines in the morning, but started buying in the afternoon, pushing premiums up to RMB 40-70/mt.

Aluminum
SHFE 1506 aluminum contract climbed to RMB 13,435/mt after starting Tuesday’s night session at RMB 13,405/mt, and closed at RMB 13,400/mt. Trading volumes totaled 8,410 lots, with positions up 468 to 125,988.

On Wednesday, the most active contract fell to RMB 13,370/mt, as investors took profit at highs to avoid risks before the US Fed announces its policy decision tonight. Finally, the contract ended at RMB 13,385/mt. Trading volumes totaled 18,402 lots, with positions down 1,764 to 123,756.

Spot aluminum largely traded between RMB 13,290-13,300/mt in Shanghai on Wednesday, discounts of RMB 100-110/mt over SHFE 1504 aluminum contract, versus RMB 13,280-13,300/mt in Wuxi, and RMB 13,330-13,350/mt in Hangzhou. SHFE 1504 aluminum contract edged lower, turning market players in spot market bearish. Processors bought only to need, while traders generally stayed out of the market. This sent prices down. In the afternoon, inquiries were rarely heard.

Lead
SHFE 1506 lead contract prices continued to rise after opening at RMB 12,725/mt for night trading Tuesday, and closed the session at RMB 12,745/mt, up RMB 80/mt.

The June delivery lead fell to RMB 12,625/mt early Wednesday as short positions increased. SHFE 1506 lead contract prices regained some losses later and ended at RMB 12,680/mt, up RMB 15/mt.

Goods of Chihong Zn & Ge quoted at about RMB 12,720/mt, and those of Nanfang and Chengyuan were offered at RMB 12,680-12,700/mt, on par with SHFE 1505 copper contract prices. Humon’s goods were offered at RMB 12,650-12,690/mt. Nanfang Nonferrous shipped out goods in small amounts. Although traders and downstream buyers intended to replenish stocks, high quotations left most of them on the sidelines. In Henan, lead prices were RMB 12,610-12,650/mt, higher than SMM refined lead prices.

Zinc
SHFE 1506 zinc contract prices opened at RMB 16,230/mt Tuesday evening, then inched up to RMB 16,300/mt, but fell slightly later and closed the day at RMB 16,240/mt, up RMB 45/mt or 0.28%. Total positions increased 2,196 to 138,422. SHFE 1506 zinc contract prices opened at RMB 16,240/mt on Wednesday, and extended gains, but rolled back early increases as a large number of longs left the market, and closed at RMB 16,190/mt, down RMB 5/mt or 0.03%. Trading volumes decreased 8,688 to 60,812 lots, and total positions fell 7,992 to 128,234. SHFE 1506 zinc contract prices are expected to meet resistance at RMB 16,300-16,500/mt in the near term.

#0 zinc prices were between RMB 16,070-16,090/mt, RMB 100-80/mt below SHFE 1506 zinc contract prices. #1 zinc was traded between RMB 15,970-15,990/mt. SHFE 1506 zinc contract prices fell to RMB 16,170/mt after opening, causing spot discounts to narrow from RMB 120-100/mt to RMB 100-80/mt. Traders lacked profit, leaving trading muted. Cargo holders held back goods, while downstream buyers took a wait-and-see attitude due to limited orders and since they had built stocks previously, with transactions quiet. Shuangyan and Yuguang #0 zinc prices were RMB 16,080-16,090/mt, RMB 90-80/mt below SHFE 1506 zinc contract prices. Qinxin and Qilin #0 zinc prices were RMB 16,070-16,080/mt, with spot discounts of RMB 100-90/mt against SHFE 1506 zinc contract prices. SMC #0 zinc prices were RMB 16,050-16,060/mt, with spot discounts of RMB 130-120/mt against SHFE 1506 zinc contract prices. Indian and Netherlandish #0 zinc prices were RMB 15,980-16,000/mt, with spot discounts of RMB 190-180/mt against SHFE 1506 zinc contract prices. SHFE 1506 zinc contract prices remained steady in the afternoon. When combined with stable spot discounts, trading muted.

Tin
In Shanghai spot tin market, sluggish consumption sent mainstream traded prices down by RMB 500/mt to RMB 116,000-118,000/mt on Wednesday. Falling prices discouraged sellers from selling. Nanshan and Jinlong brand tin traded at RMB 116,000-116,500/mt, RMB 116,500-117,000/mt for Yunxiang brand, and RMB 117,800-118,000/mt for Yunxi brand tin.

Nickel
SMM #1 nickel prices were between RMB 94,900-966,000/mt. SHFE 1507 nickel contract prices closed at RMB 93,500/mt in the morning session, allowing traders to sell off goods. Downstream buyers were reticent, with trading muted and traded prices between RMB 94,100-96,000/mt. LME nickel prices rebounded in the afternoon, but spot nickel prices did not rise. With a large inflow of imported nickel, premiums of Russian nickel against 1505 nickel contract prices on the Wuxi electronic trading dropped significantly from RMB 1,300/mt to RMB 500/mt. SMM understands April will see a large influx of imported nickel, so spot premiums should fall or invert to discounts. As a large number of bargain hunters entered the market in the afternoon, transactions improved, with traded prices between RMB 94,100-96,100/mt. Jinchuan Group lowered prices by RMB 3,000/mt to RMB 97,000/mt.