​[Base Metal] SMM Base Metals Market Daily Review (2015-7-16)

SHANGHAI, Jul. 17 (SMM) – 

Copper 

SHFE 1509 copper started at RMB 40,670/mt and ended down RMB 170/mt or 0.42% at RMB 40,290/mt Wednesday night, with the low-end price at RMB 40,260/mt.

On Thursday, SHFE copper touched a low of RMB 39,880/mt earlier but later rolled backed the losses thanks to jumping stock-index futures prices. The red metal extended the rising momentum to advance to RMB 40,740/mt, to close at RMB 40,680/mt, gaining RMB 220/mt or 0.54%. Trading volumes were up 85,438 lots but positions fell 3,822.

Cargo holders were raised spot premiums but markets did not accept the hike. Besides, more copper imports flowed into Chinese market, sending spot premiums down. Traders rushed to buy at low while downstream buyers purchased on need, leaving trades quiet. 

Spot copper was offered RMB 220-300/mt higher than SHFE 1508 copper in Shanghai Thursday morning and narrowed to RMB 180-260/mt in the afternoon. Traded prices were RMB 40,900-40,980/mt for standard-quality copper and RMB 40,920-41,020/mt for high-quality copper. 

Aluminum      

SHFE 1509 aluminum contract fell slightly on Thursday morning, but jumped above the 20-day moving average to RMB 12,655/mt in the afternoon on rumors of planned production cuts at smelters. The contract ended the day at RMB 12,545/mt. Trading volumes totaled 54,318 lots, and positions were down 5,264 lots to 117,958 lots. The price rise was accompanied with falling positions, implying that longs remained cautious about entering. 

Aluminum prices were mainly between RMB 12,270-12,280/mt in Shanghai, Wuxi and Hangzhou on Thursday, discounts of RMB 80-90/mt over August aluminum on the SHFE. Trading remained thin, causing prices to fall by RMB 10/mt. In the afternoon, most held back goods out of bullishness after SHFE aluminum rose.

Lead

SHFE 1509 lead dipping to RMB 13,075/mt after starting at RMB 13,210/mt during Wednesday evening session. The price closed the session at RMB 13,100/mt, down RMB 50/mt.

The most active contract fell to RMB 13,015/mt after opening Thursday trading session but later grew as shorts exited market, to end at RMB 13,200/mt, rising RMB 40/mt. Trading volumes totaled 4,818 lots and positions were up 58 to 12,624.

In spot market, traded prices were RMB 13,320-13,350/mt for Nanfang, Hanjiang, Humon and Dongling brands, RMB 220/mt higher than SHFE 1509 lead. Chengyuan brand quoted RMB 13,280/mt, a discount of RMB 50/mt against SHFE 1508 lead, versus RMB 13,200-13,250/mt for Shuangyan brand (packed in iron).

Few smelters shipped goods out. But growing inventories at traders forced them to give their price offers with many branded lead arriving to Shanghai in recent two weeks. Large producers cut purchase and other producers only purchased as needed. Trades remained anemic July 16.

Zinc

SHFE 1509 zinc contract prices opened at RMB 15,780/mt Wednesday evening, then edged down to RMB 15,700/mt, and closed at RMB 15,665/mt, up RMB 80/mt. SHFE 1509 zinc contract prices dipped to RMB 15,620/mt at one point after opening, but edged up and touched as high as RMB 15,790/mt, and closed at RMB 15,760/mt, up RMB 175/mt or 1.12%. Trading volumes increased 21,664 lots to 172,932 lots, and total positions decreased 6,262 to 118,386. SHFE 1509 zinc contract prices are expected to rise to RMB 15,800/mt.

#0 zinc prices were between RMB 15,680-15,730/mt, RMB 20/mt below or RMB 20/mt above SHFE 1509 zinc contract prices. #1 zinc prices were RMB 15,640-15,680/mt. SHFE 1509 zinc contract prices fluctuated between RMB 15,680-15,690/mt, with spot premiums between RMB 0-20/mt against SHFE 1509 zinc contract prices. As SHFE 1509 zinc contract prices edged up to RMB 15,700-15,740/mt, spot discounts were RMB 0-20/mt. Smelters increased supply on rising zinc prices, but traders sold modestly, with overall supply limited. Traders were unwilling to purchase at high price afer delivery, and downstream buyers purchased as needed, with overall transactions limited. SHFE 1509 zinc contract prices fluctuated between RMB 15,720-15,770/mt in the afternoon, with spot discounts between RMB 0-20/mt.

Tin

In Shanghai spot tin market, wait-and-see sentiment among buyers sent prices down on July 16. Most deals closed at RMB 110,800-113,000/mt. Prices for goods from Yunnan Tin Group held firm at RMB 112,500-113,000/mt, though, due to tight supply. 

Nickel   

SMM #1 nickel prices were between RMB 83,700-85,700/mt. Premiums of Jinchuan nickel against the most actively traded contracts on the Wuxi electronic trading were RMB 900/mt in the morning. It was reported nickel inventories surged as finance-driven imports sold actively, but trading was limited, with traded prices between RMB 84,500-85,700/mt. Russian nickel prices fell to RMB 600/mt below the most actively traded contracts on the Wuxi electronic trading due to selloffs of Russian nickel. Some traders purchased actively at lows, but overall transactions were still lackluster, with traded prices between RMB 84,500-85,800/mt. Jinchuan Group lowered price by RMB 1,700/mt to RMB 85,800/mt.