[Base Metal] SMM Base Metals Market Daily Review (2015-7-17)

SHANGHAI, Jul. 20 (SMM) –

Copper

SHFE 1509 copper contract reached RMB 40,650/mt on Friday but rolled back some gains later, to end at RMB 40,480/mt, growing RMB 50/mt or 0.12%. Trading volumes slipped 157,000 lots and positions fell 2,440.

SHFE announced that copper stocks in its warehouses grew 3,725 mt to 109,001 mt last week.

In spot market, some traders purchased for term contract in Shanghai, especially favoring hydro-copper and standard-quality copper. Near noon, cheap copper was hard to source with price gap between standard-quality and high-quality copper prices narrowing. Downstream buyers purchased as needed.

Spot copper was offered at a premium of RMB 190-260/mt over SHFE 1508 copper early Friday, but the premiums edged higher to RMB 210-270/mt in the afternoon. Traded prices were RMB 40,950-41,030/mt for standard-quality copper, versus RMB 40,980-41,080/mt for high-quality copper.

Aluminum

SHFE 1509 aluminum contract fell to RMB 12,470/mt last Friday morning, but rallied in the afternoon before ending at RMB 12,520/mt. Trading volumes totaled 19,016 lots, and positions were up 176 lots to 118,134 lots. Judging from changes in positions, SHFE 1510 aluminum contract might become the most active contract this week. 

Aluminum prices were mainly between RMB 12,340-12,360/mt in Shanghai on Friday, discounts of RMB 80-100/mt over August aluminum on the SHFE, versus RMB 12,350-12,360/mt in Wuxi and RMB 12,350-12,360/mt in Hangzhou. Sellers rushed to sell after prices rebounded. But buyers showed low interest out of doubt over the sustainability of the price rise. In the afternoon, only a few deals were done. 

Lead

SHFE 1509 lead started at RMB 13,045/mt during Thursday evening session and then fluctuated between RMB 13,050-13,130/mt, to finish at RMB 13,080/mt, losing RMB 50/mt.

Today was the delivery day for China stock-index futures including IF1507, IH1507and IC1507, allowing the Shanghai Composite Index to be near 4,000, fueling market confidence. SHFE 1509 lead reached RMB 13,190/mt on Friday but later dropped with longs closing positions, to close at RMB 13,115/mt, falling RMB 15/mt. Trading volumes totaled 3,396 lots with positions down 100 to 12,524.

In spot lead market, Nanfang and Chengyuan brands quoted RMB 13,350/mt, RMB 250/mt higher than SHFE 1509 lead, but few deals were made. Mainstream prices were RMB 13,300-13,340/mt for Hanjiang, Dongling and Humon brands, versus RMB 13,170/mt for Shuangyan brand (packed in iron).

Western Mining only moved a small number of goods and market was filled with lead from traders. Downstream buyers showed little interest in building stocks before weekends. Market thus saw light trades.

Zinc

SHFE 1509 zinc contract prices opened at RMB 15,695/mt last Thursday evening, then hovered around RMB 15,650/mt, and closed at RMB 15,610/mt, down RMB 85/mt. SHFE 1509 zinc contract prices rose to RMB 15,700/mt at one point last Friday, and touched as high as RMB 15,710/mt, and closed at RMB 15,665/mt, down RMB 30/mt or 0.19%. Trading volumes decreased 55,468 lots to 117,464 lots, and total positions decreased 1,710 to 116,676.

#0 zinc prices were between RMB 15,630-15,670/mt, RMB 10/mt below or RMB 10/mt above SHFE 1509 zinc contract prices. #1 zinc prices were RMB 15,600-15,620/mt. SHFE 1509 zinc contract prices fluctuated between RMB 15,650-15,670/mt, down RMB 40-50/mt, with spot prices ranging from RMB 10/mt below to RMB 10/mt above SHFE 1509 zinc contract prices, with spot premiums expanding to RMB 20-10/mt at one point. Smelters increased more actively on rising zinc prices. Some traders that had been unwilling to sell on limited inventories increased supply due to expectations of expanding spot discounts. Traders purchased modestly. Overall downstream buying interest was low on sluggish orders, leaving overall transactions quiet. SHFE 1509 zinc contract prices edged up to RMB 15,680-15,700/mt in the afternoon, with spot discounts widening to RMB 40-10/mt at one point, but narrowing to RMB 0-10/mt at the end of trading.

Tin

In Shanghai spot tin market, most deals closed at RMB 110,800-113,000/mt on July 17. Goods from Yunnan Tin Group traded at RMB 112,500-113,000/mt. However, holders of Yunxi brand tin cut offers to RMB 112,000/mt in the afternoon due to inflow of deliverable goods. Spot prices will face downward pressure this week as more deliverable goods flow in. 

Nickel

SMM #1 nickel prices were between RMB 84,100-85,900/mt. Premiums of Jinchuan nickel against the most actively traded contracts on the Wuxi electronic trading were RMB 900/mt in the morning. Cargo holders sold actively in the morning as nickel price were stable, but downstream buying interest was low, with traded prices between RMB 84,400-85,700/mt. Premiums of Jinchuan nickel against the most actively traded contracts on the Wuxi electronic trading fell to RMB 500/mt in the afternoon, and spot discounts of Russian nickel price against the latter were RMB 800/mt. Selloffs grew, but downstream buyers refrained from buying, with traded prices between RMB 84,300-85,700/mt.