SMM Base Metals Market Daily Review (2015-5-13)

SHANGHAI, May 14 (SMM) – 

 

Copper 

The most active SHFE copper contract stayed in a narrow range in most of Wednesday’s daytime trading, but rallied to RMB 46,390/mt at the tail of the session and finished up RMB 520/mt at RMB 46,260/mt. Trading volumes grew 52,876 lots, and positions increased 5,822. The July-delivery copper has found stronger support after climbing above the 5-day moving average.

 

Spot copper was offered at premiums of 10-90/mt to SHFE 1505 copper contract in Shanghai early Wednesday. Standard-quality copper traded at RMB 46,100-46,140/mt, and high-quality copper sold for RMB 46,140-46,200/mt. Rapid increase in SHFE copper caused spot premiums to narrow in the afternoon. Standard-quality copper was once offered at discount of RMB 20/mt.

 

Cargo holders sold actively at highs and held prices up out of bullish mood. Quotations for high-quality copper varied largely. Some traders sourced goods at lows, but purchases made by downstream producers declined noticeably after replenishing stocks Tuesday. 

 

 Aluminum      

China’s April industrial output, fixed asset investment and retail sales data all missed forecasts, raising hopes for more stimulus. In this context, SHFE 1507 aluminum contract moved sideways for most of the day. The contract, though, rose to RMB 13,395/mt towards the close of the afternoon session before ending Wednesday at RMB 13,380/mt. Trading volumes totaled 26,398 lots, and positions were up 1,908 to 133,478. Prices might challenge resistance at RMB 13,400/mt.  

 

Spot aluminum largely traded between RMB 13,070-13,080/mt in Shanghai on Wednesday, discounts of RMB 140-150/mt over SHFE 1505 aluminum contract, versus RMB 13,050-13,080/mt in Wuxi, and RMB 13,090-13,100/mt in Hangzhou. Some suppliers decided not to sell until after the delivery date of SHFE 1505 aluminum contract. Traders were active in the market, while processors were cautious about buying. In the afternoon, suppliers held back goods out of bullishness after SHFE aluminum drifted higher. 

 

Lead

SHFE 1507 lead opened at RMB 13,445/mt Tuesday night and then moved higher to finish at RMB 13,510/mt. The contract moved around RMB 13,500/mt Wednesday morning. The metal moved above the 20-day moving average in the afternoon as China’s April manufacturing output grew 5.9% YoY, up 0.3 percentage point MoM and as April new home sales area climbed 7% versus April 2014, the first rise since early 2014. The July-delivery lead hit day’s high of RMB 13,675/mt and was last up RMB 345/mt or 1.83% at RMB 13,620/mt. Trading volumes dropped 104 to 6,946 lots and positions fell 294 to 15,334.

 

In spot market, quotes were RMB 13,800-13,830/mt for Tongguan and Nanfang brands, with RMB 300-330/mt premiums over SHFE 1507 lead contract price. Honglu brand traded at RMB 13,500/mt. A small number of Tongguan and Nanfang goods flowed into market. Meanwhile, cargo holders refrained from selling, causing a tight supply in spot market. Downstream producers purchase on need and high spot premium enticed them to mainly buy under term contract. 

 

 Zinc

SHFE 1507 zinc contract prices opened at RMB 17,020/mt Tuesday evening, but lacked ability to rise, and closed at RMB 17,030/mt, up RMB 125/mt or 0.74%. Trading volumes decreased 24,530 to 90,026 lots, and total positions grew 3,616 to 141,126. SHFE 1507 zinc contract prices opened at RMB 17,030/mt on Wednesday, and broke through RMB 17,100/mt in the afternoon, and closed at RMB 17,140/mt, up RMB 235/mt or 1.39%. Trading volumes decreased 15,862 to 228,200 lots, and total positions grew 6,892 to 144,402. SHFE 1507 zinc contract prices are expected to strengthen this evening.

 

#0 zinc prices were between RMB 16,900-16,940/mt, RMB 140-110/mt below SHFE 1507 zinc contract prices. #1 zinc was traded between RMB 16,860-16,870/mt. SHFE 1507 zinc contract prices rose RMB 200/mt to RMB 17,050/mt, with spot discounts of #0 zinc expanding from RMB 120-100/mt to RMB 140-120/mt against SHFE 1507 zinc contract prices. Downstream buying interest was weak, leading to slow sales at smelters, with overall transactions quiet. Shuangyan and Huize #0 zinc prices were RMB 16,930-16,940/mt, RMB 120-110/mt below SHFE 1507 zinc contract prices. Yuguang #0 zinc prices were RMB 16,910-16,920/mt, RMB 120/mt below SHFE 1507 zinc contract prices. Qilin, Jiulong and Qinxin #0 zinc prices were RMB 16,900-16,920/mt, with spot discounts of RMB 140-120/mt against SHFE 1507 zinc contract prices. Baohui, Bailing and SMC #0 zinc prices were RMB 16,880-16,890/mt, with spot discounts of RMB 170-150/mt against SHFE 1507 zinc contract prices. Indian #0 zinc prices were RMB 16,870-16,880/mt, with spot discounts of RMB 180-170/mt against SHFE 1507 zinc contract prices. SHFE 1507 zinc contract prices edged up in the afternoon, with spot discounts widening RMB 20/mt to RMB 140-150/mt for Shuangyan zinc. 

 

Tin

SHFE 1507 tin contract opened at RMB 120,800/mt on Wednesday. The contract fell back after rising to RMB 121,100/mt, but then rallied to close RMB 730/mt higher at RMB 120,700/mt. Trading volumes totaled 10,418 lots, and positions were down 346 to 7,156.

 

Tin prices in Shanghai spot market tracked SHFE tin down to RMB 119,000-120,500/mt on Wednesday. Goods from Yunnan Tin Group traded between RMB 120,000-120,500/mt. Downstream buyers showed little interest. 

   

 Nickel   

SMM #1 nickel prices were between RMB 104,000-109,100/mt. Premiums of Jinchuan nickel remained at RMB 4,200/mt against prices for the most actively traded contracts on the Wuxi electronic trading. Jinchuan sold deliverable spot goods at a price RMB 1,500/mt above market prices. Downstream buying interest was weak, with traded prices between RMB 104,300-109,100/mt. Traders sold actively as nickel prices dropped in the afternoon, with spot premiums contracting. Premiums of Jinchuan nickel decreased to RMB 3,100/mt, but failed to boost downstream buying interest. A shipload of Russian nickel is expected to arrive next week. Traded prices were between RMB 104,300-108,000/mt. Jinchuan Group lowered prices by RMB 1,000/mt to RMB 109,500/mt.