SHANGHAI, Jul. 14 (SMM) –
SHFE 1509 copper started at RMB 40,410/mt during last Friday evening session and ended down RMB 200/mt or 0.49% at RMB 40,520/mt, with the session low at RMB 40,260/mt and the session high at RMB 40,630/mt. Positions declined 626 with trading volumes totaling 150,000 lots.
The most trading contract tested a low of RMB 39,740/mt on Monday and closed the day at RMB 40,130/mt, falling RMB 590/mt or 1.45%. Trading volumes of SHFE 1509 copper dropped 271,000 lots while positions rose 4,808. Trading volume of SHFE 1510 copper were down 45,514 lots while positions grew 15,456.
In Shanghai market, spot copper was offered RMB 40-120/mt higher than SHFE 1507 copper on Monday morning. Traded prices were RMB 40,860-40,960/mt for standard-quality copper and RMB 40,880-41,000/mt for high-quality copper. In the afternoon, the premiums narrowed further to only RMB 10-70/mt.
Price gap between SHFE 1507 and 1508 copper widened above RMB 500/mt. Traders cut their price offers with the upcoming deliver day, increasing supply. The availability of imported goods also grew in market. Buyers made inquiries but limited transactions were made. Some traders purchased for term contracts and few speculators entered market, waiting for further price falls. Downstream buyers planned to purchase after the delivery.
On Monday, SHFE 1509 aluminum contract fluctuated between the 5-day and 10-day moving averages. The contract fell to RMB 12,370/mt in the afternoon before ending at RMB 12,395/mt. Trading volumes totaled 18,256 lots, and positions were down 514 lots to 124,234 lots. Any room for more gains should be limited.
Aluminum prices were mainly between RMB 12,280-12,290/mt in Shanghai on Monday, discounts of RMB 10-0/mt over July aluminum on the SHFE, RMB 12,280-12,290/mt in Wuxi and RMB 12,300-12,310/mt in Hangzhou. More sellers became willing to sell after spot discounts narrowed to near zero. But downstream buyers mostly watched from the sidelines. This caused traded prices to fall. In the afternoon, some cut offers to RMB 12,270-12,280/mt after SHFE aluminum dipped, with trading lackluster.
Last Friday evening, SHFE 1509 lead opened at RMB 12,970/mt and ended at RMB 12,920/mt, down RMB 50/mt.
Market sentiment turned downbeat due to lingering Greek cash crisis. SHFE lead fell to RMB 12,850/mt immediately after opening Monday trading session. China’s import and export data for May beat estimate but China Customs reported great pressure in the following months due to falling trades with Japan and the EU. SHFE lead dived to RMB 12,770/mt with shorts gathering strength, to finish down RMB 130/mt at RMB 12,840/mt.
Nanfang brand quoted RMB 13,300/mt in spot market with few trades made. Hanjiang and Humon brands were offered RMB 330/mt higher than SHFE 1509 lead at RMB 13,200/mt, versus RMB 13,100/mt for Shuangyan brand (packed in iron).
Spot prices held firm in Shanghai due to tight supply as shipments from Guangxi Chengyuan Mining & Smelting and Hechi Nanfang Nonferrous Metals Group were delayed owing to the typhoon. Wait-and-see sentiment loomed market, leaving trades soft.
SMM survey of 30 industry insiders reveals that half of them see lead prices to fall this week, with LME lead touching USD 1,750/mt and spot lead price in China retreating to RMB 13,000/mt. Although Greece has struck a deal with international creditors, its impact on the market will be limited. Besides, influence of Chinese A-shares on base metal markets will also recede. In this context, the strong US dollar, China’s economic slowdown and weak fundamentals in the offseason will combine to push down lead price. Lead demand from downstream producers is weak as low battery prices and high finished goods inventories will continue to curb battery production.
Only 7% of the surveyed are bullish that LME lead will rise to USD 1,850/mt and spot lead prices will edge higher to RMB 13,200-13,300/mt. The settlement of Greek debt issue and continued increase in China’s stock prices will boost market sentiment, lending support to metal prices. These players also argue that secondary lead prices in China hold firm on tight scrap battery supply and higher costs resulting from a VAT rebate cut, which may also bode well for lead prices.
The remaining 43% expect lead prices to remain steady this week due partly to stabilizing Chinese stock market. Net long positions in lead stopped falling, and technical support has formed at lower price levels. But poor lead consumption in China will leave little momentum for price to move higher. In spot market, limited supply and weak demand will trap prices in the current moving range.
SHFE 1509 zinc contract prices opened at RMB 15,295/mt last Friday evening, then hovered between RMB 15,220-15,320/mt, and closed at RMB 15,295/mt, down RMB 20/mt. China’s exports in June grew 2.8% YoY, but imports fell 6.1% YoY, fueling market concerns of further decline in China’s demand. SHFE 1509 zinc contract prices fell slightly after opening on Monday, then hovered around RMB 15,200/mt. As eurozone leaders reached an agreement with Greece on its debt issue near the end of trading, SHFE 1509 zinc contract prices closed at RMB 15,245/mt, down RMB 70/mt or 0.46%. Trading volumes decreased 86,972 lots to 93,580 lots, and total positions increased 634 to 128,924. SHFE 1509 zinc contract prices are expected to rise this evening.
#0 zinc prices were between RMB 15,250-15,280/mt, RMB 50-70/mt above SHFE 1509 zinc contract prices. #1 zinc prices were RMB 15,210-15,230/mt. SHFE 1509 zinc contract prices fell RMB 150/mt to RMB 15,200-15,220/mt, increasing spot premiums of #0 zinc. There were few cheap regular brands supplies. Smelters continued to hold back goods on low zinc prices, with quotes for some brands firm. SHFE spot-month zinc contract prices were RMB 50-60/mt above spot zinc prices. Some traders purchased at lows, and traders held prices firm, with trading brisk. Downstream buying interest weakened, with transactions mainly made among traders. SHFE 1509 zinc contract prices fluctuated between RMB 15,200-15,210/mt, with spot premiums largely unchanged.
On Monday, SHFE 1509 tin contract opened at RMB 107,780/mt, and hovered around RMB 107,470/mt for most of the day. Finally, the contract ended down RMB 310/mt or 0.29% at RMB 107,530/mt. The most active SHFE tin contract is expected to test support at RMB 106,000/mt and meet resistance at RMB 111,000/mt in the short term.
In Shanghai spot tin market, spot prices stabilized at RMB 111,000-113,000/mt on July 13. Supply was tight due to upcoming delivery of SHFE front-month tin contract. Trading was thin. Goods from Yunnan Tin Group traded at RMB 112,500-113,000/mt.
SMM #1 nickel prices were between RMB 81,400-83,300/mt. Premiums of Jinchuan nickel against the most actively traded contracts on the Wuxi electronic trading were RMB 1,200/mt in the morning. Downstream buyers purchased modestly as nickel prices dropped further, with trading quiet and traded prices between RMB 81,400-82,600/mt. Jinchuan Group was reluctant to sell as nickel prices inched lower in the afternoon, leading premiums of Jinchuan nickel high. But purchases improved, with traded prices between RMB 81,100-82,700/mt.
Jinchuan Group lowered prices by RMB 3,000/mt to RMB 83,500/mt.