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SMM Base Metals Market Daily Review (2015-6-9)
Jun 10,2015 10:04CST
SMM Comments
SHFE 1508 copper contract prices opened at RMB 43,100/mt for Monday’s night session and rose to RMB 43,240/mt.

SHANGHAI, Jun. 10 (SMM) –

SHFE 1508 copper contract prices opened at RMB 43,100/mt for Monday’s night session and rose to RMB 43,240/mt. However, the prices failed to break through the 5-day moving average and finally ended at RMB 43,140/mt, up RMB 60/mt.

August-delivery SHFE copper contract stayed around RMB 43,180/mt during daytime trading Tuesday, and rose to RMB 43,350/mt before closing at RMB 43,250/mt, up RMB 170. Trading volumes dropped 79,928lots and positions were down 9,722.

Spot copper premiums in Shanghai remained at RMB 50-90/mt to SHFE 1506 copper contract Tuesday. Traded prices were RMB 43,380-43,460/mt for standard-quality copper and RMB 43,400-43,490/mt for high-quality copper.

SHFE copper prices moved narrowly early Tuesday, and cargo holders in spot market mainly watched from the sidelines. Supply grew at midday, but the amount of imported copper was limited. Traders were not active in making deals and downstream buyers also only purchased as needed in the morning. Some traders entered the market in the afternoon to buy on dips.

On Tuesday, SHFE 1508 aluminum dropped to RMB 12,930/mt on disappointing China May CPI and PPI. The contract returned above the daily moving average in the afternoon, but fell again later to close at RMB 12,950/mt. Trading volumes totaled 23,802 lots, and positions were up 3,120 to 135,144. Technical indicator suggests that the game between longs and shorts is intense. Other base metals on the SHFE have shown signs of stabilizing, so SHFE aluminum might bottom out.

SHFE 1506 aluminum contract fell further to RMB 12,815/mt on Tuesday, dragging spot aluminum in east China down. Spot aluminum largely traded between RMB 12,770-12,780/mt in Shanghai, discounts of RMB 50-60/mt over SHFE 1506 aluminum contract, versus RMB 12,750-12,770/mt in Wuxi, and RMB 12,780-12,790/mt in Hangzhou. Downstream producers began to enter the market after watching from the sidelines for several days, but bought only as needed and pushed for lower prices. Traders showed little buying interest out of pessimism. In the afternoon, market turned quiet.

SHFE 1508 lead opened at RMB 13,135/mt Monday evening session and advanced to RMB 13,260/mt, to close the session up RMB 40/mt at RMB 13,150/mt after meeting resistance at the 10 and 20-day moving averages.

China’s CPI grew 1.2% YoY while PPI fell 4.6% YoY in May, boosting the case for another reserve rate cut. Thus, the August delivery lead advanced to RMB 13,150-13, 200/mt during Tuesday session, to end the day at RMB 13,150/mt, up RMB 55/mt.

In China’s spot market, Nanfang brand quoted RMB 13,700/mt, RMB 540/mt higher than SHFE 1508 lead. Shuangyan (packed in plastic) brand goods traded at RMB 13,620-13,650/mt, versus RMB 13,350/mt for Shuangyan (packed in iron) and Honglu brands.

Hanzhong Zinc Industy Co. moved a small number of goods. As a whole, stocks at lead smelters turned tight, especially for branded lead. Downstream demand stayed weak with high spot premium still existing.

Branded goods were offered at RMB 13,550-13,575/mt in Henan and as high as RMB 13,350/mt in Guangdong on tight spot supply.

SHFE 1508 zinc contract prices opened at RMB 16,285/mt Monday evening, then surged to RMB 16,375/mt, but fell back to RMB 16,300/mt later on and closed at RMB 16,305/mt, up RMB 30/mt or 0.18%. SHFE 1508 zinc contract prices opened at RMB 16,320/mt, then rebounded with LME zinc prices, though increases were modest, and closed at RMB 16,330/mt, up RMB 55/mt or 0.34%. Trading volumes increased 3,352 to 84,136 lots, and total positions fell 1,096 to 127,460. Any downward room for SHFE 1508 zinc contract prices will lack ability to rise this evening.

#0 zinc prices were between RMB 16,270-16,290/mt, RMB 40-20/mt below SHFE 1508 zinc contract prices. #1 zinc prices were RMB 16,230-16,240/mt. SHFE 1508 zinc contract prices fluctuated between RMB 16,300-16,320/mt, up RMB 30/mt, with spot discounts expanding RMB 10-20/mt. Cargo holders held prices firm, but traders were unwilling to purchase on the lack of arbitrage opportunity. Downstream buyers purchased as needed, leaving overall transactions quiet. SHFE 1508 zinc contract prices edged up slightly in the afternoon, with spot discounts widening RMB 10/mt and trading quiet.

In Shanghai spot tin market, downstream buying cooled on Tuesday. But limited supply helped prices hold largely stable. Most deals closed at RMB 113,500-115,000/mt. Goods from Yunnan Tin Group traded at RMB 114,000-115,000/mt.

SMM #1 nickel prices were between RMB 98,000-101,200/mt. Jinchuan Group adjusted their quotes slightly on rising nickel futures prices in the morning, with premiums of Jinchuan nickel against the most actively traded nickel contracts on the Wuxi electronic trading down to RMB 2,100/mt. Traders sold off goods, but purchases were sluggish, with traded prices between RMB 100,700-100,900/mt. SHFE nickel prices rose further in the afternoon, but spot nickel prices proved more resistant to increases. Discounts of Russian nickel against the most actively traded nickel contracts on the Wuxi electronic trading expanded to RMB 700/mt, but downstream buying interest was weak, muting trading and with traded prices between RMB 98,200-101,200/mt. Jinchuan Group hiked prices by RMB 1,000/mt to RMB 101,000/mt.

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

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