SMM Base Metals Market Daily Review (2015-5-15)

SHANGHAI, May 18 (SMM) –

Copper
The most active SHFE copper contract dipped to RMB 45,770/mt early Friday but then regained the losses to end the daytime trading at RMB 46,040/mt, up RMB 40/mt. SHFE 1507 copper contract positions grew 2,048, and trading volumes declined 59,560 lots.

SHFE 1505 copper contract closed up RMB 30/mt at RMB 46,020/mt on its last trading day, with positions at 12,920.

SHFE reported a 10,147 mt decline in copper stocks last week to 173,157 mt.

Spot copper was still offered at premiums of 40-140/mt to SHFE 1505 copper contract in Shanghai Friday morning. Standard-quality copper traded at RMB 45,830-46,000/mt, and high-quality copper sold for RMB 45,880-46,050/mt.

Price gap between SHFE 1505 and 1506 copper contracts was around RMB 50/mt on the last trading day of the May-delivery copper. Some traders optimistic about copper premiums sourced cheaper goods in the market. Cargo holders refrained from selling, however, considering high SHFE 1506 copper contract prices, expanding spot premiums to RMB 140/mt near midday. Downstream buyers were cautious towards purchases as quotations differed largely.

Aluminum
Last Friday, SHFE 1507 aluminum contract moved lower in the morning session, but bounced back to RMB 13,360/mt in the afternoon. The contract ended at RMB 13,335/mt. Trading volumes totaled 25,600 lots, and positions were up 38 to 132,026.

Spot aluminum largely traded between RMB 13,060-13,070/mt in Shanghai last Friday, discounts of RMB 100-110/mt over SHFE 1505 aluminum contract, versus RMB 13,040-13,060/mt in Wuxi, and RMB 13,090/mt in Hangzhou. Spot discounts continued narrowing since the delivery date of SHFE 1505 aluminum contract is nearing. Demand picked up before the weekend. In the afternoon, suppliers held back out of bullishness after SHFE aluminum rallied, leaving trading quiet.

Lead
SHFE 1507 lead dropped in response to falling LME lead. The contract opened at RMB 13,480/mt Thursday night and then dived to RMB 13,300/mt, to end down RMB 165/mt. SHFE 1507 lead hovered around RMB 13,350/mt on Friday and finished at RMB 13,360/mt, down RMB 125/mt, off 0.93%. Trading volumes were up 1,222 to 7,082 lots whereas positions dropped 210 to 14,858.

In spot market, Tongguan, Nanfang and Hengbang brands were offered RMB 450-500/mt premiums over SHFE 1507 lead at RMB 13,800-13,850/mt. Honglu brand traded RMB 100/mt higher than SHFE 1506 lead contract price. Lead smelters held goods back and downstream producers refused to purchase at highs. Lead smelters remained reluctant to sell with branded lead quoting RMB 13,750-13,800/mt in Henan, versus RMB 13,400/mt in Guangdong.

Zinc
SHFE 1507 zinc contract prices opened at RMB 16,940/mt Thursday evening, then dropped to RMB 16,840/mt, and closed at RMB 16,870/mt, down RMB 0.82%. Trading volumes decreased 64,456 to 86,050 lots, and total positions fell 2,054 to 130,018. SHFE 1507 zinc contract prices opened at RMB 16,875/mt on Friday, then fluctuated below RMB 17,000/mt as a large number of long left the market, and closed at RMB 16,935/mt, down RMB 75/mt or 0.44%. Trading volumes decreased 52,888 to 121,098 lots, and total positions fell 14,704 to 117,368. SHFE 1507 zinc contract prices are expected to drop below the 20-day moving average this evening.

#0 zinc prices were between RMB 16,730-16,790/mt, RMB 140-110/mt below SHFE 1507 zinc contract prices. #1 zinc was traded between RMB 16,750-16,780/mt. SHFE 1507 zinc contract prices fell further, with spot discounts largely unchanged. Traders sold actively, and smelters moved goods normally, leaving supply sufficient. Downstream buying interest, however, was weak. Shuangyan #0 zinc prices were RMB 16,760-16,790/mt, RMB 120-110/mt below SHFE 1507 zinc contract prices. Qilin, Jiulong and Qinxin #0 zinc prices were RMB 16,730-16,760/mt, with spot discounts of RMB 140-130/mt against SHFE 1507 zinc contract prices. SHFE 1507 zinc contract prices edged up to RMB 16,900/mt in the afternoon, with cargo holders holding back goods. Discounts of Shuangyan #0 zinc expanded RMB 10-20/mt.

Tin
Tin prices in Shanghai spot market changed little last Friday. Most deals closed between RMB 118,000-119,500/mt. Goods from Yunnan Tin Group traded between RMB 119,000-119,500/mt, RMB 118,500-119,000/mt for Yunheng brand tin, and RMB 117,500-118,000/mt for Nanshan and Jinlong brand tin.

Nickel
SMM #1 nickel prices were between RMB 101,500-105,400/mt. Nickel prices fell, allowing traders to sell proactively. Demand weakened, with traded prices between RMB 101,900-105,300/mt. Nickel futures prices edged up in the afternoon, but spot nickel prices remained steady. Downstream buyers took a wait-and-see attitude, with transactions quiet and traded prices between RMB 102,000-105,300/mt.