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SMM Base Metals Market Daily Review (2015-7-1)
Jul 2,2015 10:16CST
price review forecast
SHFE 1509 copper contract prices hovered near RMB 42,000/mt Wednesday morning.

SHANGHAI, Jul. 2 (SMM) –

SHFE 1509 copper contract opened at RMB 41,950/mt and dipped to RMB 41,560/mt. Later, the prices were driven up with shorts exiting the market and touched a high of RMB 42,200/mt. The September-delivery copper ended the session at RMB 42,000/mt, down by RMB 210/mt.

SHFE 1509 copper contract prices hovered near RMB 42,000/mt Wednesday morning. In the afternoon, the September-delivery copper rose to RMB 42,300/mt but then came across resistance and fell back to RMB 41,950/mt before ending at RMB 41,970/mt, down by RMB 240/mt. Trading volumes of the most active SHFE copper contract increased 65,336 lots and positions declined 8,292.

On Wednesday, spot copper quoted a premium of RMB 220-270/mt over SHFE 1507 copper in Shanghai. Mainstream prices were RMB 42,500-42,600/mt for standard-quality copper and RMB 42,520-42,650/mt for high-quality copper.

Market activities failed to pick up completely on July 1 as liquidity has not fully flowed into market. Price gap between 1507 and 1508 copper on SHFE widened more than RMB 100/mt overnight. A small number of speculators bought copper to further increase spot premiums in the morning, but spot premiums did not respond to that. Traders reported a trouble in hunting goods at low whereas wait-and-see posture overshadowed downstream market. As a whole, markets mainly saw deals between traders.

China’s official manufacturing PMI for June was 50.2, and HSBC’s China manufacturing PMI was 49.4 in the same month, both missing forecasts. This caused SHFE 1509 aluminum contract to fall to RMB 12,500/mt on Wednesday. Trading volumes totaled 39,706 lots, and positions were up 6,604 lots to 131,554 lots. Prices are expected to remain at current lows in the short term.

Spot aluminum largely traded between RMB 12,420-12,430/mt in Shanghai on Wednesday, discounts of RMB 70-80/mt over SHFE 1507 aluminum contract, versus RMB 12,410-12,430/mt in Wuxi, and RMB 12,430-12,450/mt in Hangzhou. Processors and traders showed little buying interest, causing prices to fall. In the afternoon, market turned quiet.

The most trading contract SHFE 1508 lead moved around RMB 12,600/mt after opening Tuesday evening session at RMB 12,795/mt. The price rebounded modestly as longs entered market, to end down RMB 120/mt at RMB 12,680/mt.

On Wednesday, the contract hovered around RMB 12,680/mt and advanced to RMB 12,750/mt on growing longs, to end at RMB 12,770/mt, slipping RMB 30/mt. Total trading volumes were 3,752 lots and positions fell 182 to 13,688.

In domestic spot market, traded prices were RMB 450/mt higher than SHFE 1508 lead at RMB13,200/mt for Nanfang brand lead Wednesday, versus RMB 13,120/mt for Hanjiang brand, RMB 13,050/mt for Ximai and Shuangyan (packed in iron) brands.

Spot supply in branded lead tightened with Western Mining Co. shipping goods out. Downstream producers sourced goods at low early July as they believed that spot prices will not fall a lot after ongoing drop. Thus, trades picked up yesterday.

SHFE 1509 zinc contract prices opened at RMB 15,235/mt, then dropped to a new low of RMB 15,125/mt, and closed at RMB 15,210/mt, down RMB 135/mt. SHFE 1509 zinc contract prices fluctuated around RMB 15,230/mt on Wednesday, and once rose to RMB 15,340/mt, and closed at RMB 15,230/mt, down RMB 115/mt. Trading volumes increased 12,348 to 134,916 lots, and total positions grew 2,906 to 139,512. SHFE 1509 zinc contract prices will test support from RMB 15,200/mt this evening.

#0 zinc prices were between RMB 15,220-15,280/mt, RMB 10-50/mt above SHFE 1509 zinc contract prices. #1 zinc prices were RMB 15,190-15,230/mt. SHFE 1509 zinc contract prices fell RMB 130/mt to RMB 15,200-15,250/mt, with trading improving and spot premiums expanding RMB 10-20/mt. Despite rising SHFE zinc prices, spot premiums did not narrow significantly. Some smelters held back goods on eased cash tightness, with price spread widening RMB 10/mt. Downstream buyers purchased as needed, while arbitrage traders purchased at lows, causing overall transactions to increase. SHFE 1509 zinc contract prices fell back in the afternoon, with spot premiums between RMB 20-50/mt against SHFE 1509 zinc contract prices.

In Shanghai spot tin market, buyers went bargain hunting after prices fell sharply on July 1. Mainstream traded prices were RMB 111,200-112,500/mt. Goods from Yunnan Tin Group traded at RMB 112,500-113,500/mt.

SMM #1 nickel prices were between RMB 87,000-88,600/mt. Premiums of Jinchuan nickel against the most actively traded contracts on the Wuxi electronic trading rose to RMB 500/mt in the morning. Discounts of Russian nickel against Jinchuan nickel were RMB 500/mt. Traders sold actively, with traded prices were between RMB 87,700-88,900/mt. LME nickel prices fluctuated in a narrow range in the afternoon, and premiums of Jinchuan nickel against the most actively traded contracts on the Wuxi electronic trading remained around RMB 500/mt in the afternoon, while discounts of Russian nickel at RMB 500/mt. Trading was brisk as downstream purchases were brisk. Jinchuan Group lowered price by RMB 5,200/mt to RMB 88,300/mt.


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

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