SMM Base Metals Market Daily Review (2015-6-4)

SHANGHAI, Jun. 5 (SMM) – 

 

Copper 

SHFE 1508 copper contract prices started Wednesday’s night session at RMB 43,600/mt and rose to RMB 43,660/mt. The prices then moved lower at the tail of the session and ended at RMB 43,470/mt, down RMB 270/mt.

 

The August-delivery SHFE copper was still under downward pressure on Thursday, and once touched RMB 43,340/mt after a slump in Chinese shares. The red metal then regained some losses to end at RMB 43,400/mt, down RMB 340/mt. Positions in the most active copper contract declined 758 and trading volumes increased 11,746 lots.

 

Spot copper was offered at premiums of RMB 50-90/mt to SHFE 1506 copper contract in Shanghai early Thursday and the premiums fell to RMB 40-80/mt in the afternoon. Transactions were mainly done at RMB 43,680-43,720/mt.

 

Goods holders left premiums little changed Thursday after SHFE copper declined, and speculators found it hard to source low-priced goods. Hydro-copper prices remained firm on tight supply. Downstream buyers rarely entered the market, leaving trades light.

 

On Thursday, SHFE 1508 aluminum contract rebounded to RMB 13,130/mt after opening at RMB 13,100/mt. But the light metal followed other base metals down in the afternoon to RMB 13,080/mt before ending at RMB 13,105/mt. Trading volumes totaled 29,702 lots, and positions were down 2,458 to 132,794. Prices will test support at RMB 13,000/mt due to negative technical side and strong bearishness.  

   

Spot aluminum largely traded between RMB 12,920-12,930/mt in Shanghai on Thursday, discounts of RMB 80-90/mt over SHFE 1506 aluminum contract, versus RMB 12,900-12,920/mt in Wuxi, and RMB 12,940-12,950/mt in Hangzhou. Aluminum prices showed no signs of a turnaround. Downstream producers continued to restock only as needed. In the afternoon, some cut offers slightly after SHFE aluminum fell, and a few traders went bargain hunting.   

 

SHFE 1508 lead started at RMB 13,110/mt during night session Wednesday and touched RMB 13,180/mt, to end down RMB 105/mt at RMB 13,070/mt as longs left market.

 

The contract hit a high of RMB 13,240/mt after opening Thursday session and finished at RMB 13,215/mt, up RMB 40/mt or 0.3%. Trading volumes jumped 918 to 3,774 lots whilst positions fell 94 to 10,862.

 

Nanfang and Chengyuan brands traded at RMB 510/mt higher than SHFE 1508 lead contract price at RMB 13,680-13,710/mt with Shuangyan (packed in iron) and older Honglu brand goods settling at RMB 13,350/mt.

 

China’s spot supply hiked as lead smelters sold goods as usual and some hedged goods from traders entered market. Downstream buyers refused to buy branded refined lead at highs in Shanghai due to marked price advantage of secondary lead.

 

Branded goods in Henan were offered a par to SMM price average at RMB 13,580-13,630/mt.

 

SHFE 1508 zinc contract prices opened at RMB 16,400/mt Wednesday evening, then hovered around RMB 16,400/mt, and closed at RMB 16,380/mt, down RMB 105/mt or 0.64%. Trading volumes decreased 16,624 to 48,086 lots, and total positions dropped 1,594 to 136,920. SHFE 1508 zinc contract prices opened at RMB 16,375/mt on Thursday, then inched down and dipped to an intraday low of RMB 16,285/mt as a large number of longs left the market. Later the day, SHFE 1508 zinc contract prices found some support from bargain hunters but met resistance at the 60-day moving average, and closed at RMB 16,405/mt, down RMB 80/mt or 0.49%. Trading volumes decreased 53,938 to 126,954 lots, and total positions fell 4,762 to 133,752. SHFE 1508 zinc contract prices are expected to fall further this evening.

 

#0 zinc prices were between RMB 16,290-16,320/mt, RMB 50-30/mt below SHFE 1508 zinc contract prices and RMB 70-50/mt below SHFE 1507 zinc contract prices. #1 zinc prices were RMB 16,260-16,280/mt. SHFE 1508 zinc contract prices fell RMB 150/mt, causing spot discounts to narrow RMB 50/mt. Some smelters held back goods on continuously falling zinc prices. When combined premiums on zinc prices in Guangdong against Shanghai prices, smelters in South China reduced supply to Shanghai. Traders mostly held onto their goods on expectations of spot premiums, allowing spot discounts to contract. Traders and downstream buyers purchased modestly at lower prices, leaving overall transactions quiet. SHFE 1508 zinc contract prices rose RMB 40/mt in the afternoon, with spot discounts of #0 zinc between RMB 80-50/mt and trading quiet.

 

In Shanghai spot tin market, mainstream traded prices were stable at RMB 114,000-115,500/mt on Thursday. Downstream producers actively hunted for cheap goods. Some deliverable goods from Yunnan traded around RMB 114,000/mt. 

 

SMM #1 nickel prices were between RMB 94,700-98,500/mt. Traders sold goods proactively as Jinchuan Group lowered prices, leading to oversupply. Premiums of Jinchuan nickel against the most actively traded nickel contracts on the Wuxi electronic trading fell to RMB 2,700/mt, with the price spread between SHFE nickel and Wuxi electronic trading nickel narrowing further. Downstream buying interest was low, leaving trading muted and traded prices between RMB 95,000-98,000/mt. Nickel futures prices held stable in the afternoon. But premiums of Jinchuan nickel decreased with ample supply from traders, allowing downstream buyers to enter the market. However, trading remained quiet and traded prices were between RMB 95,000-98,000/mt. Jinchuan Group lowered prices by RMB 2,000/mt to RMB 99,000/mt.