SMM Base Metals Market Daily Review (2015-4-17)

SHANGHAI, Apr. 20 (SMM) – 

 

The most active SHFE copper contract hovered near RMB 43,700/mt on Friday and lacked momentum to rise further. At the tail of trading, the prices touched a high-end level seen Thursday night and ended up RMB 550/mt at RMB 43,690/mt. Trading volumes in SHFE 1506 copper contract fell by 20,816 lots and positions posted a 24,700 decline. SHFE reported a 9,940 mt decline in copper stocks to 230,835 mt last week.

 

Spot copper was offered at premiums of RMB 80-120/mt to SHFE 1505 copper contract on Friday. Prices are RMB 43,380-43,890/mt for standard-quality copper and RMB 43,820-43,920/mt for high-quality copper.

 

Some speculators bought goods in spot market after SHFE copper rebounded, and quotations for hydro-copper and standard-quality products remained high on scarcity. However, transactions were rarely made after prices climbed. Both sellers and buyers refused to budge on prices.

 Aluminum      

Last Thursday night, SHFE 1506 aluminum contract slid to RMB 13,160/mt due to profit-taking at highs after starting at RMB 13,235/mt. The most active contract ended the night session at RMB 13,195/mt. Trading volumes totaled 11,472 lots, with positions down 2,700 to 119,468.

 

Last Friday, the most active contract hovered narrowly above RMB 13,200/mt in quiet macro front for most of the day. But prices inched down at the tail of the day due to exit of bulls, closing at RMB 13,190/mt. Trading volumes totaled 36,348 lots, with positions down 8,288 to 113,880.

 

SHFE 1505 aluminum contract drifted higher to RMB 13,220/mt on Friday. Spot aluminum largely traded between RMB 13,090-13,100/mt in Shanghai, discounts of RMB 100-110/mt over SHFE 1505 aluminum contract, versus RMB 13,080-13,100/mt in Wuxi, and RMB 13,140-13,150/mt in Hangzhou. Demand picked up slightly ahead of the weekend. In the afternoon, sellers held offers stable, with a few deals reported.

Economic indicators, including March industrial added value, fixed assets investment and Chinese Q1 GDP, were far below expectation, weighing on the June delivery lead prices to RMB 13,080/mt. But later SHFE 1506 lead ended at RMB 13,180/mt, up RMB 105/mt, thanks to expectations for more policy stimulus in China.

 

Trading volumes totaled 11,186 lots and positions fell 1,052 to 17,790 with short positions falling more than long positions. 

 

Quotes were RMB 13,650-13,700/mt for lead of Chihong Zn & Ge, and about RMB 13,600/mt for Nanfang’s goods, with premiums of RMB 1000/mt to SHFE 1506 lead contract prices. Hanjiang brand and Humon were offered at RMB 13,520-13,530/mt and RMB 13,430-13,520/mt, respectively. Quotations varied largely with traders holding goods back, and downstream buyers rarely made purchases due to high prices. Supply from Henan declined with smelters starting maintenance.

SHFE 1506 zinc contract prices opened high but moved lower overnight, falling to RMB 16,600/mt, and closed the day at RMB 16,590/mt, up RMB 55/mt or 0.33%. Trading volumes were down 18,538 to 63,496 lots, and total positions decreased 1,646 to 116,666. SHFE 1506 zinc contract prices opened at RMB 16,585/mt on Friday, then fell to a low of RMB 16,545/mt, then strengthened and reached RMB 16,545/mt, and closed at RMB 16,620/mt, up RMB 85/mt or 0.51%. Trading volumes decreased 34,292 to 115,488 lots, and total positions decreased 3,806 to 114,506. Positions of SHFE 1507 zinc contracts grew 7,588 to 94,028.

 

#0 zinc prices were between RMB 16,460-16,520/mt, RMB 150-100/mt below SHFE 1506 zinc contract prices. #1 zinc was traded between RMB 16,400-16,410/mt. SHFE 1506 zinc contract prices fluctuated around RMB 16,610/mt after opening, up RMB 70/mt, with spot discounts expanding RMB 10/mt. Smelters sold actively, leading to healthy supply. Traders purchased modestly, and most downstream buyers took a wait-and-see attitude, leaving overall transactions muted. Shuangyan #0 zinc prices were RMB 16,500-16,520/mt, RMB 100/mt below SHFE 1506 zinc contract prices. Yuguang #0 zinc prices were RMB 16,490-16,500/mt, RMB 110/mt below SHFE 1506 zinc contract prices. Qinxin, Feilong and Qilin #0 zinc prices were RMB 16,460-16,480/mt, with spot discounts of RMB 150-130/mt against SHFE 1506 zinc contract prices. SMC #0 zinc prices were RMB 16,430-16,440/mt, with spot discounts of RMB 180-170/mt against SHFE 1506 zinc contract prices. Indian and Namibia’s #0 zinc prices were RMB 16,360-16,390/mt, with spot discounts of RMB 250-220/mt against SHFE 1506 zinc contract prices. SHFE 1506 zinc contract prices rose RMB 50/mt in the afternoon, with spot discounts widening RMB 150-100/mt, with transactions quiet.

In Shanghai spot tin market, mainstream traded prices fell further to RMB 110,500-112,000/mt last Friday, due to slump in LME tin last Thursday. Some cut offers of Jinlong brand tin to RMB 110,000/mt, luring some buyers in.

SMM #1 nickel prices were between RMB 93,600-95,500/mt. Premiums of imported nickel inverted to discounts, pushing some traders to losses. Downstream buyers purchased cautiously, with trading muted and traded prices between RMB 93,600-95,100/mt. Spot nickel prices fell further in the afternoon, causing spot premiums to fall further, with trading quiet and traded prices between RMB 92,800-94,300/mt.