[Base Metal] SMM Base Metals Market Daily Review (2015-7-21)

SHANGHAI, Jul. 22 (SMM) –

Copper

SHFE 1509 copper started at RMB 39,800/mt during evening session Monday and then dipped to RMB 39,640/mt. The red metal then tested RMB 40,230/mt but gave back earlier gains near the session’s end, to close at RMB 39,940/mt.

September-delivery copper faced upside pressure at RMB 40,150/mt during Tuesday morning session and dropped in the afternoon, to finish at RMB 40,080/mt, up RMB 140/mt or 0.35%. Trading volumes fell 107,000 lots and positions declined 7,094.

Spot copper quoted RMB 210-270/mt higher than SHFE 1508 copper in Shanghai, compared with RMB 40,520-40,620/mt for standard-quality copper and RMB 40,540-40,660/mt for high-quality copper.

Cargo holders left their offers unchanged. But sluggish trades forced some traders to lower spot premiums. Downstream producers purchased for immediate requirements. Spot supply increased while trades were anemic.

Aluminum

SHFE 1510 aluminum contract was range-bound on Tuesday, and closed flat with opening price at RMB 12,485/mt. Trading volumes totaled 14,944 lots, and positions were up 3,770 lots to 122,424 lots.

Aluminum prices were mainly between RMB 12,250-12,260/mt in Shanghai on Tuesday, discounts of RMB 110-120/mt over August aluminum on the SHFE, versus RMB 12,250-12,260/mt in Wuxi and RMB 12,260-12,270/mt in Hangzhou. SHFE 1508 aluminum contract continued falling, turning buyers in spot market bearish. Trading remained slack. In the afternoon, trading remained thin.  

Lead

Rebounding gold prices lent some support to base metal prices on Tuesday. SHFE 1510 lead fluctuated between RMB 12,940-13,000/mt before ending at RMB 12,970/mt, growing RMB 40/mt. Trading volumes totaled 1,896 lots and positions rose 852 to 13,948. Many positions of SHFE 1508 and 1509 lead shifted to SHFE 1510 lead July 21, possibly resulting from large price gap between the most active contract and near month contracts.

In domestic market, traded prices were RMB 13,300-13,320/mt for Tongguan and Nanfang brands July 21, a premium of RMB 350/mt over SHFE 1510 lead. Humon, Hanjiang and Yubei brands were offered at RMB 13,280-13,290/mt, versus RMB 13,130/mt for Shuangyan (packed in iron) and Honglu brands.

Goods from Shandong Humon Smelting Co. flowed into market with shortage in branded lead in market. LME lead posted a large drop July 20 but SHFE lead and China spot lead resisted declines. Wait-and-see sentiment loomed downstream market, leaving trades light.

Zinc

SHFE 1509 zinc contract prices opened at RMB 15,500/mt Monday evening, then hovered between RMB 15,500-15,600/mt, and closed at RMB 15,540/mt, down RMB 45/mt or 0.29%. Trading volumes decreased 5,660 to 42,288 lots, and total positions grew 1,316 to 112,956. SHFE 1509 zinc contract prices opened at RMB 15,500/mt, then fell with the exodus of longs after profit-taking, and dipped to RMB 15,505/mt. In the afternoon, SHFE 1509 zinc contract prices rose to RMB 15,550-15,580/mt, and closed at RMB 15,580/mt, down RMB 5/mt or 0.03%. Trading volumes decreased over 40,000 lots to 87,172 lots, and total positions decreased 2,600 to 109,000. SHFE 1509 zinc contract prices are expected to remain range-bound.

#0 zinc prices were between RMB 15,510-15,560/mt, RMB 10/mt below or RMB 20/mt above SHFE 1509 zinc contract prices. #1 zinc prices were RMB 15,480-15,500/mt. SHFE 1509 zinc contract prices fluctuated between RMB 15,540-15,580/mt after opening, with spot price ranging from RMB10/mt below to RMB 20/mt above SHFE 1509 zinc contract prices. As SHFE 1509 zinc contract prices fell to RMB 15,500-15,520/mt, spot premiums were RMB 0-20/mt.

Smelters sold normally, while traders held back goods. Downstream buying interest was weak, and traders also took a wait-and-see attitude, leaving overall truncations quiet. SHFE 1509 zinc contract prices pointed toward RMB 15,600/mt in the afternoon, with spot premiums turning to discounts of RMB 20-10/mt at one point.

Tin

In Shanghai spot tin market, trading was thin. Mainstream traded prices were RMB 111,000-112,500/mt on July 21. Goods from Yunnan Tin Group traded at RMB 111,500-112,000/mt.   

Nickel

SMM #1 nickel prices were between RMB 85,500-86,900/mt. Premiums of Jinchuan nickel against the most actively traded contracts on the Wuxi electronic trading were RMB 600/mt in the morning. Downstream buyers remained cautious in the morning as nickel price rose, with trading muted and traded prices between RMB 85,600-86,700/mt. Nickel prices stabilized in the afternoon, but downstream buyers were unwilling to purchase at higher prices. It was reported the SRB will build nickel stocks, but traders refrained from buying on high inventories, with overall transactions quiet and traded prices between RMB 85,900-87,100/mt. Jinchuan raised nickel price by RMB 1,000/mt to RMB 86,800/mt.