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SMM Base Metals Market Daily Review (2015-5-19)
May 20,2015 10:20CST
price review forecast
Source:SMM
The most active SHFE copper contract stabilized at RMB 45,800/mt early Tuesday, and then moved higher to RMB 45,950/mt before ending at RMB 45,710/mt.

SHANGHAI, May 20 (SMM) –

Copper
SHFE 1507 copper contract prices opened at RMB 45,960/mt for night session of Monday, and dipped to a low of RMB 45,680/mt before ending at RMB 45,780/mt, down by RMB 190/mt. Positions decreased 3,202 and trading volumes grew to about 120,000 lots.

The most active SHFE copper contract stabilized at RMB 45,800/mt early Tuesday, and then moved higher to RMB 45,950/mt before ending at RMB 45,710/mt, falling by RMB 260/mt. SHFE 1507 copper contract positions declined 9,272, and trading volumes grew 13,190 lots.

Spot copper was still offered at premiums of RMB 40-130/mt to SHFE 1506 copper contract in Shanghai Tuesday morning. Standard-quality copper traded at RMB 45,850-45,980/mt, and high-quality copper sold for RMB 45,880-46,050/mt. Spot premiums were RMB 50-120/mt in the afternoon.

Cargo holders offered higher premiums early Tuesday, and some speculators sourced goods in the market, enlivening spot trades. Later, however, some traders increased supplies, causing spot premiums to narrow, especially for high-quality copper. Downstream buyers still purchased as needed.

Aluminum
On Tuesday, SHFE 1507 aluminum contract lurched higher to RMB 13,260/mt near lunchtime. But the contract fell back later to close at RMB 13,235/mt. Trading volumes totaled 28,858 lots, and positions were down 6,028 to 123,172. Technically, the contract might head for more losses.

Spot aluminum largely traded between RMB 13,040-13,050/mt in Shanghai on Tuesday, discounts of RMB 130-150/mt over SHFE 1506 aluminum contract, versus RMB 13,030-13,040/mt in Wuxi, and RMB 13,050-13,060/mt in Hangzhou. Holders of hedged goods became eager to sell after spot discounts narrowed, but traders watched from the sidelines, sending prices down. In the afternoon, some cut offers to RMB 13,035/mt to promote sales, but trading was subdued.

Lead
SHFE 1507 lead prices moved up with Chinese shares and touched a high of RMB 13,435/mt, and hovered near RMB 13,420/mt. The prices finally closed at RMB 13,335/mt, down RMB 40/mt.

In domestic lead market, spot supply in branded lead tightened and thus few trades were made. Spot market was mainly filled with old goods. Hanjiang and Shuangyan (packed in iron) brands quoted RMB 13,850-13,880/mt. Honglu brand was offered a RMB 100/mt premium over SHFE 1506 lead at RMB 13,550-13,580/mt. Lead smelters and traders held back sales with the later rushing to purchase. Wait-and-see posture overshadowed downstream producers and high spot prices forced them mainly to buy under term contract. Some downstream buyers switched to secondary lead, leaving trades muted. Quotes in Henan were RMB 13,800-13,850/mt for branded one.

Zinc
SHFE 1507 zinc contract prices opened at RMB 16,835/mt Monday evening, then dropped to RMB 16,800/mt, and closed at RMB 16,795/mt, down RMB 25/mt or 0.15%. Trading volumes decreased 37,956 to 29,122 lots, and total positions fell 364 to 106,418. SHFE 1507 zinc contract prices opened at RMB 16,795/mt on Tuesday, then rebounded with LME zinc prices, touching as high as RMB 16,910/mt. In the afternoon, SHFE 1507 zinc contract prices lacked ability to rise and closed at RMB 16,865/mt, up RMB 45/mt or 0.27%. Trading volumes decreased 37,262 to 85,834 lots, and total positions fell 1,174 to 105,608. SHFE 1507 zinc contract prices are expected to fall further this evening.

#0 zinc prices were between RMB 16,680-16,760/mt, RMB 130-100/mt below SHFE 1507 zinc contract prices. #1 zinc was traded between RMB 16,690-16,700/mt. SHFE 1507 zinc contract prices fluctuated around RMB 16,810/mt during 9:00-10:15 am, with spot discounts narrowing to RMB 120-100/mt to RMB 130-110/mt. SHFE 1507 zinc contract prices edged up to RMB 16,860-16,880/mt during 10:30-11:30 am, with spot discounts widening to RMB 130-110/mt. Supply from smelters was sufficient, but traders were unwilling to sell, lending support to spot prices. But downstream buyers refrained from purchasing on higher zinc prices. Trading improved some due to term contract deals. Shuangyan #0 zinc prices were RMB 16,710-16,760/mt, RMB 120-100/mt below SHFE 1507 zinc contract prices. Yuguang #0 zinc prices were RMB 16,700-16,750/mt, RMB 130-110/mt below SHFE 1507 zinc contract prices. Qilin and Qinxin #0 zinc prices were RMB 16,680-16,750/mt, with spot discounts of RMB 130-120/mt against SHFE 1507 zinc contract prices. SMC and Tongguan #0 zinc prices were RMB 16,660-16,730/mt, with spot discounts of RMB 150/mt against SHFE 1507 zinc contract prices. Indian #0 zinc prices were RMB 16,650-16,720/mt, with spot discounts of RMB 160-170/mt against SHFE 1507 zinc contract prices. SHFE 1507 zinc contract prices fluctuated between RMB 16,850-16,880/mt in the afternoon, with spot discounts largely unchanged, and trading muted.

Tin
In Shanghai spot market, downstream producers showed little buying interest out of pessimism on Tuesday. This sent traded prices down to RMB 116,500-119,000/mt.

Nickel
SMM #1 nickel prices were between RMB 100,200-105,000/mt. Nickel futures prices fell in the morning, but premiums of Jinchuan nickel rose to RMB 4,000/mt against prices for the most actively traded contracts on the Wuxi electronic trading. Downstream buyers turned cautious, leaving transactions quiet and traded prices between RMB 100,600-104,800/mt. Nickel prices stabilized in the afternoon, and downstream buyers only purchased modestly, with trading muted and traded prices between RMB 100,300-104,500/mt.
 

SHFE copper prices
SHFE aluminum prices
SHFE lead prices
SHFE zinc prices
Shanghai tin prices
Shanghai nickel prices

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