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SMM Base Metals Market Daily Review (2015-5-28)
May 29,2015 09:53CST
price review forecast
Source:SMM
SHFE 1508 copper contract prices opened lower for the night session at RMB 44,080/mt and rose to RMB 44,360/mt.

SHANGHAI, May 29 (SMM)--
Copper:
SHFE 1508 copper contract prices opened lower for the night session at RMB 44,080/mt and rose to RMB 44,360/mt. Some shorts entered the market when prices increased, causing prices to retreat to RMB 44,000/mt. The prices finally ended the night session at RMB 44,120/mt, down RMB 70/mt.

The August-delivery SHFE copper moved in a narrow range early Thursday and tested a low of RMB 44,000/mt following a 6.4% plunge in Chinese shares. The prices then followed LME copper up in the afternoon and ended the daytime trading at RMB 44,250/mt. SHFE 1508 copper positions grew 4,340, with trading volumes up 45,554 lots. Total SHFE copper positions fell by 14,402.

Spot copper was quoted at premiums of RMB 0-70/mt to SHFE 1506 copper contract in Shanghai Thursday morning, with trading enlivened. Standard-quality copper traded at RMB 44,280-44,320/mt, and high-quality copper sold for RMB 44,300-44,380/mt. Spot premiums narrowed slightly in the afternoon to RMB 0-50/mt.

Cargo holders offered relatively high prices Thursday and some speculators sourced goods in the market, expanding spot premiums. Hydro-copper and standard-quality copper were favored by buyers. However, tight cash by the end of the month curbed increase in trading activities.

Aluminum:
SHFE 1508 aluminum contract was range-bound on Thursday and ended the day at RMB 13,175/mt. Trading volumes totaled 33,002 lots, and positions were up 8,676 to 123,802.

Spot aluminum largely traded between RMB 12,920-12,930/mt in Shanghai on Thursday, discounts of RMB 140-150/mt over SHFE 1506 aluminum contract, versus RMB 12,880-12,910/mt in Wuxi, and RMB 12,960-12,980/mt in Hangzhou. Aluminum prices continued falling, leaving sellers unwilling to sell. Some traders just finished delivery under term contracts, reducing market availability. The price decline slowed near lunchtime, so some traders and processors entered the market to make small-scale purchases. In the afternoon, wait-and-see sentiment dominated as SHFE 1506 aluminum contract moved sideways.

Zinc:
SHFE 1508 zinc contract prices opened at RMB 16,550/mt Wednesday evening, then rose to RMB 16,785/mt, and closed at RMB 16,705/mt, up RMB 100/mt or 0.6%. Trading volumes increased 28,210 to 68,776 lots, and total positions grew 14,564 to 122,522. SHFE 1508 zinc contract prices opened at RMB 16,700/mt on Thursday, then edged up as a large number of longs entered the market, but fell back to as low as RMB 16685/mt in the afternoon, and closed at RMB 16,835/mt, up RMB 230/mt or 1.39%. Trading volumes increased 96,582 to 189,616 lots, and total positions grew 27,792 to 135,750. SHFE 1508 zinc contract prices are expected to maintain upward momentum this evening.

#0 zinc prices were between RMB 16,580-16,610/mt, RMB 100-70/mt below SHFE 1507 zinc contract prices. #1 zinc prices were RMB 16,540-16,560/mt. SHFE 1507 zinc contract prices fluctuated between RMB 16,680-16,690/mt during 9:00-10:15 am, with spot discounts largely unchanged. SHFE 1507 zinc contract prices rose above RMB 16,700/mt after 11:00 am, with spot discounts of Shuangyan #0 zinc around RMB 100/mt at one point. Smelters ramped up supply on rising zinc prices, and traders mainly made term contract deals, with trading between traders brisk. Downstream buying interest, however, was weak. Shuangyan #0 zinc prices were RMB 16,600-16,610/mt, RMB 80-70/mt below SHFE 1507 zinc contract prices. Yuguang #0 zinc prices were RMB 16,590-16,600/mt, RMB 90-80/mt below SHFE 1507 zinc contract prices. Feilong, Qilin and Qinxin #0 zinc prices were RMB 16,580-16,590/mt, with spot discounts of RMB 100-90/mt against SHFE 1507 zinc contract prices. Baohui and Tongguan #0 zinc prices were RMB 16,550-16,570/mt, with spot discounts of RMB 130-110/mt against SHFE 1507 zinc contract prices. KZ and YP #0 zinc prices were RMB 16,550-16,560/mt, with spot discounts of RMB 130-120/mt against SHFE 1507 zinc contract prices. Indian #0 zinc prices were RMB 16,530-16,540/mt, with spot discounts of RMB 150-140/mt against SHFE 1507 zinc contract prices. SHFE 1507 zinc contract prices fluctuated around RMB 16,680/mt in the afternoon, with #0 zinc prices ebtewen RMB 16,590-16,630/mt.

Lead:
SHFE 1507 lead opened at RMB 13,260/mt and ended at RMB 13,330/mt Wednesday night. The contract fluctuated between RMB 13,330-13,370/mt Thursday morning and finished the day at RMB 13,355/mt, up RMB 80/mt. Far-month SHFE lead contracts features falling longs and growing shorts, meaning investors are not optimistic about far-month contracts.
Hanjiang and Shuangyan brands traded RMB 500/mt higher than SHFE 1507 lead at RMB 13,850/mt in domestic spot market, with Shuangyan (packed in iron) and Honglu brands at RMB 13,500-13,550/mt.

No goods at smelters flowed into market, which instead was filled with traders’ older stocks. Lead futures advanced on Thursday, but weak demand pressed some cargo holders to cut spot prices. However, that failed to stimulate trades with one possible reason of tight liquidity at the end of month. Spot supply in Henan rose while demand cut with branded goods settling at RMB 13,800-13,850/mt, versus RMB 13,360-13,440/mt in Guangdong.

Tin:
In Shanghai spot tin market, downstream demand turned weaker as the off-season is setting in. Traders bought in small amounts early in the day, but exited the market after SHFE tin pulled back. This caused mainstream traded prices to fall to RMB 114,500-116,500/mt on Thursday. Goods from Yunnan Tin Group traded at RMB 116,000-116,500/mt.

Nickel:
SMM #1 nickel prices were between RMB 96,000-101,600/mt. Premiums of Jinchuan nickel fell to RMB 4,700/mt as traders sold actively. Spot premiums of Russian nickel also dropped. Downstream buyers purchased as needed, with traded prices between RMB 96,000-101,000/mt. Jinchuan Group lowered ex-works prices in the afternoon, causing traders to sell proactively. But downstream buyers turned cautious, leaving trading muted and traded prices between RMB 95,700-100,500/mt. Jinchuan Group raised prices by RMB 1,000/mt to RMB 101,000/mt.
 

 

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