SMM Base Metals Market Daily Review (2015-6-17)

SHANGHAI, Jun. 18 (SMM)--
Copper:
SHFE 1508 copper contract prices started at RMB 42,050/mt for night trading Tuesday and dipped to a low of RMB 41,730/mt before closing at RMB 41,770/mt, down RMB 400/mt.

The most active SHFE copper contract met resistance from RMB 42,000/mt on Wednesday and moved mainly around RMB 41,800/mt in the morning. The prices finally ended at RMB 41,810/mt, down RMB 360/mt. Positions shrank by 6,032 and trading volumes dropped 20,692 lots. SHFE 1509 copper contract positions increased 6,296.

Spot copper quoted at premiums of RMB 140-200/mt to SHFE 1507 copper contract early Wednesday. Traded prices were RMB 42,060-42,220/mt for standard-quality copper and RMB 42,080-42,260/mt for high-quality copper. In the afternoon, the spot premiums narrowed slightly to RMB 1400-190/mt due to increasing supply.

Cargo holders held goods back after SHFE copper dropped, and transactions between traders remained brisk, allowing spot premiums to expand. Downstream buyers increased purchases when prices fell to around RMB 42,000/mt.

Aluminum:
SHFE 1508 aluminum contract prices opened at RMB 12,680/mt Tuesday evening, then edged down. SHFE 1508 aluminum contract prices fluctuated around RMB 12700/mt on Wednesday, then dropped to as low as RMB 12,665/mt in the afternoon and closed at RMB 12,675/mt, down RMB 30/mt or 0.24%. Trading volumes were 20,752 lots, down 11,106 lots, and total positions decreased 428 to 122,972. Positions of SHFE 1509 aluminum contracts grew noticeably.

SHFE spot-month aluminum contract prices rose slightly on Wednesday, but met pressure from moving averages. Spot aluminum prices in Shanghai were RMB 12,580-12,590/mt, with spot discounts of RMB 80-90/mt. Mainstream prices in Wuxi were RMB 12,570-12,590/mt, with RMB 12,600-12,620/mt in Hangzhou. Cargo holders sold proactively, but downstream buying interest was low, leaving trading quieter than the same period last year. Warehouses also reported slow delivery. Quotes from traders were lowered in the afternoon as SHFE aluminum price extended losses, but market players refrained from buying.

Zinc:
SHFE 1508 zinc contract prices opened at RMB 16,095/mt Tuesday evening, then dropped to RMB 16,050/mt, and closed at RMB 16,055/mt, down RMB 40/mt or 0.25%. Trading volumes decreased 750 to 26,124 lots, and total positions grew 1,178 to 123,166. SHFE 1508 zinc contract prices fluctuated between RMB 16,020-16,030/mt after opening on Wednesday, then plummeted to RMB 15,300/mt at one point in the afternoon and closed at RMB 15,900/mt, down RMB 195/mt or 1.21%. Trading volumes increased over 30,000 to 94,900 lots, and total positions decreased 1,516 to 120,000. Trading volumes of SHFE zinc contracts surged 55,500 to 155,500 lots, and total positions grew 6,922 to 265,000. SHFE 1508 zinc contract prices should point toward RMB 15,800/mt.

#0 zinc prices were between RMB 16,050-16,070/mt, RMB 10/mt below SHFE 1508 zinc contract prices. #1 zinc prices were RMB 16,020-16,040/mt. SHFE 1508 zinc contract prices fluctuated around RMB 16,060/mt, down RMB 60-70/mt, weighing down spot zinc prices. Some smelters held onto their goods, while hedge traders sold actively, leaving supply ample. Traders turned cautious. When combined the lack of downstream orders and cash tightness, overall transactions were quiet. SHFE 1508 zinc contract prices plunged to RMB 15,900/mt in the afternoon, with spot premiums between RMB 0-30/mt.

Lead:
SHFE 1508 lead opened Tuesday evening session at RMB 12,720/mt and hovered between RMB 12,720-12,780/mt, to close at RMB 12,730/mt.

SHFE 1508 lead fluctuated between RMB 13,730-13,770/mt during Wednesday trading session and closed the session at RMB 12,705/mt with a loss of RMB 25/mt. Trading volumes totaled 4,658 lots while positions decreased 368 to 14,024.

In spot lead market, Nanfang, Chengyuan and Tongguan brands were offered a RMB 590/mt premium over SHFE 1508 lead, with the price at RMB 13,320-13,350/mt. Shuangyan (packed in iron) and older Honglu brand goods quoted RMB 13,080-13,100/mt.

Spot lead availability increased with some Tongguan, Nanfang and Chengyuan brands goods flowing into Shanghai market. Traders built some stocks due to recent tightness in branded lead in Shanghai. Downstream buyers did not replenish stocks despite the upcoming Dragon Boat Festival.

Spot discounts in Henan left unchanged against averaged SMM#1 lead price while it was difficult to source goods in Guangdong market.

Tin:
SHFE 1507 tin contract prices started at RMB 111,990/mt Tuesday night and touched a low of RMB 111,210/mt after a number of shorts entered the markets. But the prices then regained some losses and end the night session at RMB 111,700/mt, down RMB 290/mt.

The most active SHFE tin contract opened at RMB 111,550/mt early Wednesday and rose to RMB 112,240/mt at one point. The prices then edged lower with investors booking profits and closed at RMB 111,730/mt, down RMB 50/mt. Positions declined to 1,016 and trading volumes fell by 94 lots to 3,574 lots.

Spot tin prices were RMB 112,000-113,000/mt on Wednesday. Cheaper goods, such as Nanshan and Jinlong brands, were rarely seen in the market. Yunnan Tin’s goods traded at RMB 112,800-113,200/mt.

Nickel:
SMM #1 nickel prices were between RMB 94,000-96,200/mt. trading muted as nickel future prices continued to fall. Traders sold actively, while downstream buying interest was low on sluggish orders, with traded prices between RMB 94,100-95,700/mt. Nickel prices stabilized in the afternoon, with supply sufficient and premiums of Jinchuan nickel against the most actively traded contracts on the Wuxi electronic trading around RMB 900/mt. The price spread between Jinchuan and Russian nickel returned to RMB 1,500/mt. Some downstream buyers entered the market, expecting no further decline in premiums of Jinchuan nickel, but trading was still lackluster, with traded prices between RMB 93,700-95,500/mt. Jinchuan Group lowered prices by RMB 1,000/mt to RMB 97,000/mt.