SMM Base Metals Market Daily Review (2015-7-15)

SHANGHAI, Jul. 16 (SMM) – 

Copper 

SHFE 1509 copper started Tuesday evening session at RMB 40,310/mt and fell to RMB 40,130/mt. Later, the red metal advanced above RMB 40,550/mt, to end at RMB 40,450/mt, up RMB 20/mt or 0.05%. Positions saw a rise of 44 and trading volumes totaled 140,000 lots.

On Wednesday, the most trading contract slipped to RMB 40,450/mt after testing RMB 40,700/mt. The price finally closed the day at RMB 40,750/mt, its highest today, growing RMB 320/mt or 0.79%. Trading volumes fell 7,428 lots and positions declined 4,514.

Today was the last trading day for SHFE 1507 copper, which closed up RMB 20/mt at RMB 41,200/mt. Positions totaled 8,820. SHFE 1508 copper finished at RMB 41,100/mt, rising RMB 350/mt.

Spot copper traded at a discount of RMB 60-140/mt against SHFE 1507 copper on Wednesday in Shanghai. Standard-quality copper was offered at RMB 41,200-41,300/mt and RMB 41,240-41,340/mt for high-quality copper. Some sellers offered premiums of RMB 80-100/mt to SHFE 1508 copper contract in the afternoon.

In the morning, price gap narrowed to RMB 200/mt between SHFE 1507 and 1508 copper. Some high-quality copper was offered at a small discount of RMB 60/mt, but traders and downstream buyers rejected the quotes. Later, the price spread widened to about RMB 400/mt and some cargo holders were willing to cut prices to sell with copper futures prices falling, expanding spot discounts to RMB 80-100/mt for high-quality copper and to RMB 120-140/mt for standard-quality copper. Some traders were still reluctant to purchase against the large spot discounts.

Aluminum      

Despite a series of positive Chinese economic data, SHFE 1509 aluminum contract gained little upward momentum. The contract fell back shortly after rising to RMB 12,460/mt, and dropped below the daily moving average at one point in the afternoon. Finally, it ended Wednesday at RMB 12,435/mt. Trading volumes totaled 15,312 lots, and positions were up 210 lots to 123,222 lots. 

Aluminum prices were mainly between RMB 12,280-12,290/mt in Shanghai, Wuxi and Hangzhou on Wednesday, discounts of RMB 30-40/mt over July aluminum on the SHFE. Sellers remained eager to sell. But processors awaited even lower prices, and traders also lost buying interest. In the afternoon, market turned quiet.  

Lead

SHFE 1509 lead started at RMB 13,155/mt during Tuesday evening session and closed at RMB 13,205/mt, up RMB 45/mt, with the low-end price at RMB 13,065/mt.

China’s GDP for Q2 improved over forecast. But SHFE 1509 lead met strong resistance at the 60-day moving average, to close at RMB 13,180/mt, growing RMB 25/mt or 0.19%. Trading volumes fell 1,138 to 4,496 lots and positions dropped 334 to 12,566.

In Shanghai market, mainstream prices were RMB 13,350-13,380/mt for Nanfang, Hanjiang, Humon, Dongling and Tongguan brands, premiums of RMB 200/mt over SHFE 1509 lead. Shuangyan brand (packed in iron) quoted RMB 13,200-13,260/mt.

More traders gave their price offers with spot supply up in market as shipments from Jincheng Chengyuan Smelting and Hechi Nanfang Nonferrous Metal Group arrived and as Shandong Humon Smelting also moved goods out. Some large producers increased purchase July 15 with famous lead lacking for previous two days following the typhoon. Other downstream buyers only purchased for immediate requirements.

Zinc

SHFE 1509 zinc contract prices opened at RMB 15,470/mt Tuesday evening, then edged up to RMB 15,600/mt, and closed at RMB 15,610/mt, up RMB 90/mt or 0.58%. SHFE 1509 zinc contract prices edged up after opening, but met resistance at RMB 15,700/mt on Wednesday with the exodus of longs, and closed at RMB 15,695/mt, up RMB 175/mt or 1.13%. Trading volumes increased 13,908 lots to 151,268 lots, and total positions decreased 568 to 124,648.

Positions of SHFE spot-month zinc contracts held stable at 7,330, with prices fluctuating between RMB 15,650-15,680/mt, and closing at RMB 15,675/mt.

#0 zinc prices were between RMB 15650-15690/mt, RMB 10/mt below or RMB 20/mt above SHFE 1509 zinc contract prices. #1 zinc prices were RMB 15,600-15,620/mt. SHFE 1509 zinc contract prices rose to RMB 15,650-15,690/mt during 9:00-10:15 am, with spot #0 zinc prices RMB 10/mt below or RMB 20/mt above SHFE 1509 zinc contract prices, with trading quiet. SHFE 1509 zinc contract prices dropped to RMB 15,630-15,640/mt during 10:30-11:30 am, with spot premiums between RMB 10-20/mt. Smelters ramped up supply on rising zinc prices, but traders held back goods. Some cargo holders were also reluctant to sell as the delivery date nears, leaving supply limited. Purchases were muted on weak end-user demand and expectations of goods releases after delivery, leaving overall transactions lackluster. SHFE 1509 zinc contract prices continued to climb in the afternoon, growing supply, but downstream buying interest was low, with spot prices ranging from RMB 10/mt below to RMB 10/mt above SHFE 1509 zinc contract prices.

Tin

In Shanghai spot tin market, trading activity picked up on Wednesday. Spot prices were RMB 111,000-113,000/mt. Goods from Yunnan Tin Group were offered at RMB 114,000/mt. Supply is expected to increase now that delivery of SHFE 1507 tin contract has just expired.   

Nickel   

SMM #1 nickel prices were between RMB 86,200-88,200/mt. Premiums of Jinchuan nickel against the most actively traded contracts on the Wuxi electronic trading were RMB 1,000/mt in the morning. Trading between traders was active in the morning as Jinchuan raised ex-works prices. But downstream buying interest was low as they had replenished stocks, with traded prices between RMB 85,800-87,300/mt. Premiums of Jinchuan nickel against the most actively traded contracts on the Wuxi electronic trading fell to RMB 800/mt in the afternoon as nickel prices returned to downward track, allowing traders to purchase proactively. But downstream buyers withdrew, leaving overall transactions quiet and with traded prices between RMB 86,300-87,600/mt. Jinchuan Group raised price by RMB 1,200/mt to RMB 87,500/mt.