SHANGHAI, Apr. 24 (SMM) –
The most active SHFE copper contract moved around RMB 43,150/mt after opening on Thursday and slipped to RMB 42,670/mt in the afternoon due to selling pressures and China’s poor PMI data. The prices then rose slightly to close at RMB 42,990/mt, down RMB 260/mt. Trading volumes for the SHFE 1506 copper contract increased 88,126 lots and positions dropped 14,598. Trading volumes of SHFE 1507 copper contract soared 100,500 lots, while positions grew 24,236.
Spot copper was offered at premiums of RMB 240-300/mt to SHFE 1505 copper contract early on Thursday. Prices are RMB 43,220-43,560/mt for standard-quality copper and RMB 43,250-43,600/mt for high-quality copper. Premiums of high-quality copper narrowed to RMB 160-220/mt in the afternoon.
China’s weak economic releases dragged down SHFE copper, and some cargo holders pushed spot premiums to RMB 300/mt early Thursday. Standard-quality and hydro-copper were rarely found in the market. Later, some speculators started moving goods with SHFE copper rising back, restricting the increase in premiums. Downstream buyers made inquiries actively, but trading weakened later.
China decided to remove provisional export tax on aluminum bar and rod, cheering market up. This news drove SHFE 1507 aluminum contract up to RMB 13,280/mt on Thursday. Finally, the most active contract ended at RMB 13,210/mt. Trading volumes totaled 58,130 lots, with positions up 1,228 to 119,028. Prices are expected to challenge resistance at the 60-day moving average as market will continue to digest the favorable export policy.
Spot aluminum largely traded between RMB 13,010-13,030/mt in Shanghai on Thursday, discounts of RMB 140-170/mt over SHFE 1505 aluminum contract, versus RMB 13,000-13,020/mt in Wuxi, and RMB 13,040-13,060/mt in Hangzhou. SHFE 1505 aluminum contract jumped to near RMB 13,200/mt near lunchtime, turning suppliers in spot market bullish. In the afternoon, sellers raised offers further to RMB 13,110-13,120/mt as SHFE aluminum continued to rise, but trading was subdued.
HSBC’s China manufacturing PMI for April released Thursday was 49.2, lower than the expectation 49.4, pushing the June delivery lead down to RMB 13,450/mt. Later, SHFE 1506 lead rebounded as some longs entered the market and as tight supply remained tight in China’s spot lead market, to RMB 13,500/mt and closed the day at RMB 13,490/mt, down RMB 140/mt. Positions of June, July and August delivery lead contracts all increased. But the SHFE lead for July and August delivery suffered selling pressures.
In spot lead market, Humon offered RMB 13,550-13,560/mt early Thursday. Later, SHFE lead increased, and Humon, Chengyuan, and Hanjiang brands quoted at RMB 13,580-13,600/mt, a premium of RMB 100/mt to RMB 1506 lead contract. Some traders started moving goods considering high premiums and smelters still held back. Downstream buyers went bargain hunting. Lead prices in Henan were about RMB 13,550/mt. Supply remained tight in Hunan and Jiangxi.
SHFE 1506 zinc contract started at RMB 16,605/mt on Thursday and dipped to a low of RMB 16,430/mt after HSBC reported China’s manufacturing PMI weakened. Later, the prices regained some earlier losses and closed at RMB 16,560/mt, up RMB 35/mt. Trading volumes increased 21,836 lots and positions declined 2964.
Prices of #0 zinc were RMB 16,380-16,450/mt, with discounts of RMB 60-100/mt to SHFE 1506 zinc contract. #1 zinc traded at RMB 16,300-16,340/mt. Supply of ordinary brands declined some after SHFE zinc declined early Thursday, while downstream buyers refrained from buying for fear of further falls.
As for #0 zinc trades, Shuangyan brand sold for RMB 16,410-16,450/mt, with discounts of RMB 60-80/mt to SHFE 1506 zinc contract. Yuguang brand traded at RMB 16,400-16,440/mt, with discounts of RMB 80-100/mt. Product of Qilin and Qinxin brands traded at RMB 16,380-16,400/mt. Transactions of SMC were made at RMB 16,370-16,390/mt, and prices of nanometer #0 zinc were RMB 16,320-16,340/mt, a discount of RMB 160/mt to the June delivery SHFE zinc. Spot discounts widened slightly to RMB 80-110/mt in the afternoon.
In Shanghai spot tin market, mainstream traded prices rose to RMB 111,000-112,500/mt on Thursday. The rise was driven by limited supply and rising LME tin. Trading was modest. Yunxi brand tin traded between RMB 112,000-112,500/mt.
In China’s domestic spot market, SMM #1 nickel prices were between RMB 92,600-94,800/mt on Thursday.
Spot prices followed the decline in SHFE nickel prices after the release of poor HSBC’s China PMI results. Premiums of Jinchuan goods remained at RMB 1,300/mt. Weak demand left trading thin, with mainstream prices between RMB 92,900-94,600/mt.
In the afternoon business, spot prices edged lower. Supply of Jinchuan nickel tightened, while that of Russian nickel was sufficient. Next week will see arrivals of imported nickel, according to SMM sources, but the exact inbound shipments will finally depend on whether it is profitable. SMM expects the arrivals should be limited for the foreseeable future, but discounts of imported nickel will likely increase slightly. To sum up, small declines in spot prices failed to attract buying interest, so trading remained light, with prices ranging RMB 92,700-94,400/mt.