SHANGHAI, Jul. 27 (SMM)--

Copper:

Last Friday, SHFE copper dipped to RMB 37,640/mt and then moved around RMB 37,900/mt. Later, the contract tested RMB 38,200/mt and fell to RMB 37,600/mt in response to the drop in China stock market, to close at RMB 37,760/mt, down RMB 1,130/mt. Trading volumes rose 109,000 lots with positions of 46,610. Total trading volumes of SHFE copper grew 283,000 and positions increased 77,714.

SHFE reported a 7,750 mt decline in copper inventories last week to 101,251 mt.

More speculators entered spot market last Friday. In Shanghai, downstream buyers actively built stocks before weekend when copper prices fell below RMB 39,000/mt, driving supply down in market and pushing spot premiums up. SHFE copper rallied over RMB 200/mt from low near noon and trades were thus limited slightly. As a whole, downstream buyers contributed much to active trades.

Spot copper were offered RMB 350-410/mt higher than SHFE 1508 copper July 24 in Shanghai. Traded prices were RMB 38,850-39,150/mt for standard-quality copper and RMB 38,880-39,200/mt for high-quality copper.

Aluminum:

HSBC’s flash China manufacturing PMI for July hit 15-month low of 48.2. This caused SHFE 1510 aluminum contract to fall to RMB 12,280/mt early last Friday. But the contract returned above the daily moving average later to end at RMB 12,270/mt. Trading volumes totaled 29,574 lots, and positions were up 4,984 lots to 146,574 lots. More losses might lie ahead, given poor market fundamentals and negative PMI.

Aluminum prices were mainly between RMB 12,110-12,140/mt in Shanghai last Friday, discounts of RMB 120-110/mt over August aluminum on the SHFE, versus RMB 12,140-12,150/mt in Wuxi and RMB 12,150-12,160/mt in Hangzhou. Market inquiries were brisk due to restocking demand before the weekend. SHFE aluminum inched up near lunchtime, turning sellers and buyers in spot market bullish. Trading was decent. In the afternoon, trading activity waned.   

Zinc:

SHFE 1509 zinc contract prices opened at RMB 15,210/mt, then fell to RMB 15,050-15,100/mt last Thursday evening, and closed at RMB 15,065/mt, down RMB 115/mt or 0.76%. Trading volumes decreased 2,210 to 49,576 lots, and total positions grew 2,202 to 106,104. SHFE 1509 zinc contract prices dropped to RMB 14,990/mt after opening last Friday, but rose due to short covering to RMB 15,115/mt. In the afternoon, SHFE 1509 zinc contract prices dropped below RMB 15,000/mt and closed at RMB 14,985/mt, down RMB 195/mt or 1.28%. Trading volumes increased 7,390 lots to 118,164 lots, and total positions decreased 560 to 103,342. SHFE 1509 zinc contract prices are expected to fall to RMB 14,800/mt.

#0 zinc prices were between RMB 15,100-15,150/mt, RMB 50-80/mt above SHFE 1509 zinc contract prices last Friday. #1 zinc prices were RMB 15,070-15,090/mt. SHFE 1509 zinc contract prices fluctuated between RMB 15,000-15,050/mt, with spot premiums RMB 80-100/mt, and trading at the high-end of the price range limited. As SHFE 1509 zinc contract prices rallied to RMB 15,070/mt, spot premiums dropped to RMB 50-80 /mt. Some smelters were reluctant to sell on plunging zinc price. But traders sold actively, and downstream buying interest improved, allowing overall transactions to grow. SHFE 1509 zinc contract prices fell below RMB 15,000/mt in the afternoon, with spot premiums widening to RMB 70-120/mt and trading muted.

Lead:

SHFE 1510 lead started at RMB 12,735/mt during Thursday evening session and followed LME lead down after reaching RMB 12,800/m, to close at a low of RMB 12,615/mt, down RMB 120/mt. Trading volumes were only 506 lots.

On Friday, SHFE 1510 lead touched a high of RMB 12,715/mt. Base metals extended falls as a whole. China’s manufacturing PMI for July came in at 48.2, hitting a 15-month low. China’s A-shares dropped at noon. Shorts entered market at highs and thus SHFE lead ended at RMB

12,620/mt, down RMB 115/mt. Trading volumes totaled 1,976 lots and positions grew 816 to 16,194.  

In Shanghai market, Humon brand was offered RMB 420/mt higher than SHFE 1510 lead at RMB 13,100-13,130/mt on July 24. Yunxi Smelter quoted RMB 80/mt higher than SHFE 1508 lead, versus RMB 13,000/mt for Honglu brand (packed in iron).

Lead prices plunged July 24 and thus some lead smelters were resultant to sell. Only Shandong Humon Smelting Co. moved goods. As a result, spot availability was tight in market and few offers were given. High prices and tight supply curbed downstream buying interest. Deals for Honglu brand (packed in iron) were active but as a whole market saw light trades.

Tin:

SHFE 1509 tin contract opened at RMB 108,950/mt July 24. The contract fell to RMB 108,120/mt due to exit of longs, but then rallied to RMB 108,560/mt before ending at RMB 108,210/mt, down RMB 730/mt or 0.67%. Trading volumes were down 88 lots to 1,462 lots, and positions were down 52 to 2,078.     

In Shanghai spot tin market, supply was ample, and downstream producers bought only as needed. Mainstream traded prices fell to RMB 110,000-111,000/mt July 24. Goods from Yunnan Tin Group traded at RMB 110,500-111,000/mt.  

Nickel:

SMM #1 nickel prices were between RMB 82,800-84,100/mt. Premiums of Jinchuan nickel against the most actively traded contracts on the Wuxi electronic trading were RMB 600/mt in the morning. Downstream buying interest was weak as nickel prices continued to fall, with traded prices between RMB 83,100-83,800/mt. Discounts of Russian nickel against the most actively traded contracts on the Wuxi electronic trading was around RMB 100/mt in the afternoon. The discount narrowed now that traders were no longer pessimistic toward the market, but trading at this price level was muted. Both Jinchuan nickel supply and purchases decreased as stainless steel plants cut output, with traded prices between RMB 83,000-83,800/mt. Jinchuan lowered nickel price by RMB 1,000/mt to RMB 84,000/mt.