SMM Base Metals Market Daily Review (2015-7-31)

SHANGHAI, Aug. 3 (SMM) – 

Copper 

Last Friday, SHFE 1510 copper contract moved around RMB 39,350/mt during daytime trading and fell to RMB 38,190/mt after meeting resistance from RMB 38,640/mt to end at RMB 38,250/mt, down RMB 430/mt or 1.11%. Trading volumes fell 17,300 lots but positions rose 12,806.

Copper inventories in SHFE approved warehouses grew 1,866 mt to 103,117 mt, as imported copper flooded in after the SHFE/LME copper price ratio increased.

Spot premiums SHFE 1508 copper in Shanghai in China’s copper market were RMB 50-120/mt early Friday but slipped to RMB 20-60/mt at one point in the afternoon as month-end cash crunch prompted cargo holders to sell aggressively. Some traders entered the market after premiums fell, allowing spot premiums to rebound to RMB 50-100/mt later.

Traded prices were RMB 38,940-39,020/mt for standard-quality copper and RMB 38,960-39,060/mt for high-quality copper.

Aluminum      

SHFE 1510 aluminum contract struggled around the daily moving average last Friday. The contract touched day’s high of RMB 12,280/mt, and finally ended down RMB 20/mt or 0.16% at RMB 12,255/mt. Trading volumes were up 3,646 lots to 27,614 lots, and positions were up 2,518 lots to 12,262 lots.  

Aluminum prices were mainly between RMB 12,100-12,120/mt in Shanghai last Friday, discounts of RMB 80-100/mt over August aluminum on the SHFE, versus RMB 12,080-12,120/mt in Wuxi and RMB 12,100-12,120/mt in Hangzhou. Downstream consumption, though up slightly, remained sluggish due to month-end cash crunch, sending prices down. In the afternoon, trading was subdued.  

Lead

SHFE 1510 lead still outperformed LME lead and thus SMM/LME lead price ratio reached 7.6. SHFE lead dived to RMB 12,930/mt after opening at RMB 13,070/mt for night trading Thursday, to close at RMB 13,010/mt, decreasing RMB 45/mt.

On Friday, SHFE lead remained range-bound between RMB 13,000-13,050/mt, to finally end at RMB 13,000/mt, down by RMB 55/mt. Trading volumes came in at 2,102 lots and positions increased 98 to 16,894.

Nanfang brand quoted RMB 13,280/mt in Shanghai on July 31, a premium of RMB 250/mt over SHFE 1510 lead, compared with RMB 13,260/mt for Humon and Hanjiang brands and RMB 13,150-13,180/mt for Shuangyan brand (packed in iron).

Only Western Mining moved goods and most traders gave their offers. Spot availability was short in market. Downstream buyers mainly bought under term contracts.

Zinc

SHFE 1510 zinc contract prices opened at RMB 14,820/mt Thursday evening, then rose to RMB 14,900/mt, and closed at RMB 14,895/mt, down RMB 60/mt or 0.4%.  Trading volumes increased over 10,000 to 51,850 lots, and total positions grew 3,086 to 128,044. SHFE 1510 zinc contract prices fluctuated around the 5-day moving average today, and closed at RMB 14,885/mt, down RMB 60/mt or 0.4%. Trading volumes increased 452 to 98,136 lots, and total positions increased 3,208 to 128,166. SHFE 1509 zinc contract prices are expected to test support from the 5-day moving average.

#0 zinc prices were between RMB 15,070-15,140/mt, RMB 170-240/mt above SHFE 1510 zinc contract prices last Friday. #1 zinc prices were RMB 15,020-15,050/mt, with premiums of RMB 10-100/mt for Japanese and South Korean zinc and RMB 9-50/mt for Kazakhstan zinc. SHFE 1510 zinc contract prices hovered around RMB 14,900/mt after opening. Smelters sold modestly, while traders were holding prices firm, with supply tight. Downstream buyers took a wait-and-see posture, leaving overall transactions quiet. SHFE 1510 zinc contract prices consolidated inched lower in the afternoon, with trading improving. #0 zinc prices were around RMB 15,050/mt, with spot premiums between RMB 180-190/mt. Shuangyan zinc prices were around RMB 15,100/mt, with spot premiums of RMB 230/mt against SHFE 1510 zinc contract prices. 

Tin

In Shanghai spot tin market, demand remained poor. Mainstream traded prices were RMB 109,500-110,500/mt on July 31. Goods from Yunnan Tin Group traded at RMB 110,500-111,000/mt.

Nickel   

SMM #1 nickel prices were between RMB 82,300-83,300/mt. Premiums of Jinchuan nickel against the most actively traded contracts on the Wuxi electronic trading were RMB 400/mt in the morning. Jinchuan Group lowered ex-works prices in the afternoon, and downstream buyers entered the market at lows, with traded prices between RMB 82,200-82,900/mt. Nickel futures prices fell in the afternoon, with both traders and downstream buyers pessimistic, leaving trading quiet and traded prices between RMB 82,300-82,800/mt. Jinchuan lowered ex-works price by RMB 1,700/mt to RMB 82,800/mt.