SMM Base Metals Market Daily Review (2015-6-10)

SHANGHAI, Jun. 11 (SMM) –

Copper
SHFE 1508 copper contract prices started at RMB 43,320/mt for Tuesday’s night session and followed LME copper up to RMB 43,520/mt but met resistance at this level. The most active SHFE copper contract gave back earlier gains and finished the night session at RMB 43,250/mt, up RMB 50/mt.

August-delivery SHFE copper contract hovered near RMB 43,280/mt early Wednesday but drifted higher to RMB 43,350/mt and finished the daytime trading at RMB 43,370/mt, up RMB 170/mt. Trading volumes increased 7,136 lots and positions were up 860.

Spot copper premiums in Shanghai were still at RMB 50-90/mt to SHFE 1506 copper contract early Wednesday and narrowed to RMB 40-70/mt in the afternoon. Traded prices were RMB 43,500-43,560/mt for standard-quality copper and RMB 43,520-43,590/mt for high-quality copper.

Trades remained light in spot copper market, and standard-quality copper and hydro-copper still gained more popularity, narrowing their price gap with high-quality copper. Downstream buyers were unwilling to build additional stocks.

Aluminum
SHFE 1508 aluminum was range-bound on Wednesday amid quiet macro front. The contract climbed to RMB 12,960/mt in the afternoon, but then fell back to end at RMB 12,930/mt.

Spot aluminum largely traded between RMB 12,750-12,760/mt in Shanghai on Wednesday, discounts of RMB 50-60/mt over SHFE 1506 aluminum contract, versus RMB 12,740-12,760/mt in Wuxi, and RMB 12,770-12,790/mt in Hangzhou. Sellers were eager to sell, but buyers sat tight, waiting for prices to fall. In the afternoon, some suppliers in Wuxi held offers at the lower end of the price range against high levels of inventories on hand. A few buyers went bargain hunting.

Lead
The August-delivery lead on SHFE opened at RMB 13,200/mt during evening session Tuesday and moved narrowly between RMB 13,200-13,240/mt with SMM/LME lead price ratio of 6.8.

The contract touched an intra-day low of RMB 13,165/mt after opening Wednesday morning session and lurched up with support at the 5-day moving average emerging. The metal moved stably around RMB 13,230/mt and ended the day at RMB 13,225/mt, rising RMB 35/mt.

In domestic market, shortage in Nanfang brand goods pushed their spot premium up to RMB 600/mt over SHFE 1508 lead. Shuangyan (packed in plastic) brand quoted at RMB 13,690-13,700/mt with Shuangyan (packed in iron) and Honglu brands at RMB 13,380-13,400/mt.

Lead smelters held back sales and some delayed to meet orders with goods arriving next week. Downstream producers mainly bought under term contract because of high spot prices, leaving trades muted.

Henan’s smelters were active in selling with price at RMB 13,500-13,600/mt while downstream producers showed little buying interest. Gejiu’s goods traded at RMB 13,380-13,400/mt in Guangdong market with local goods availability falling. Hunan’s goods were offered a discount of RMB 70-100/mt against SMM #1 lead average price.

Zinc
SHFE 1508 zinc contract prices opened at RMB 16,400/mt Tuesday evening, then hovered between RMB 16,420-16,460/mt, and closed at RMB 16,430/mt, up RMB 100/mt or 0.61%. Trading volumes increased 4,612 to 48,998 lots, and total positions decreased 2,382 to over 125,000. SHFE 1508 zinc contract prices opened at RMB 16,430/mt, then fluctuated around RMB 16,400/mt, and closed at RMB 16,420/mt, up RMB 90/mt or 0.55%. Trading volumes increased 4,024 to 88,160 lots, and total positions fell 6,142 to 121,318. SHFE 1508 zinc contract prices will lack ability to rise this evening.

#0 zinc prices were between RMB 16,350-16,370/mt, RMB 40-30/mt below SHFE 1508 zinc contract prices. #1 zinc prices were RMB 16,310-16,330/mt. SHFE 1508 zinc contract prices fluctuated between RMB 16,390-16,410/mt, up RMB 100/mt, with spot discounts between RMB 40-30/mt. Smelters were holding back goods, and cargo holders held prices firm, leading to tight supply of regular brands and high zinc prices. But traders pushed for lower prices, and downstream buyers purchased as needed, with overall transactions quiet. SHFE 1508 zinc contract prices remained range-bound in the afternoon, with spot discounts largely unchanged and trading quiet.

Tin
In Shanghai spot tin market, weak supply and demand kept mainstream traded prices stable between RMB 113,500-115,000/mt on Wednesday. Goods from Yunnan Tin Group traded at RMB 114,500-115,000/mt.

Nickel
SMM #1 nickel prices were between RMB 97,700-10,060/mt. Traders sold actively in the morning as nickel prices continued to fall slightly. When combined with reimports of Jinchuan nickel, supply was sufficient. Trading of Russian nickel improved as downstream buyers replenished stocks, with traded prices between RMB 98,000-100,200/mt. Nickel prices rose slightly in the afternoon, but premiums of Jinchuan nickel against the most actively traded nickel contracts on the Wuxi electronic trading fell to RMB 1,700/mt. Inflows of imported nickel will decrease due to the falling SHFE/LME nickel price ratio, but spot nickel remains in overhang. Downstream buying interest was low, with traded prices between RMB 98,200-100,500/mt.