[Base Metal] SMM Base Metals Market Daily Review (2015-8-11)

SHANGHAI, Aug. 12 (SMM) –

Copper

During Monday evening session, SHFE 1510 copper started at RMB 38,010/mt and then soared to RMB 39,200/mt before ending at RMB 39,020/mt, up by RMB 1,170/mt or 3.09%. SHFE copper outperformed LME copper, pushing SHFE/LME copper price ratio up to 7.36. Trading volumes were 340,000 lots and positions fell 8,612. 

SHFE copper once advanced to RMB 39,820/mt as shorts exited market for day trading Tuesday and then narrowly moved around RMB 39,200/mt with SHFE/LME copper price ratio above 7.5. The red metal finally closed at RMB 39,060/mt, up RMB 1,210/mt, gaining 3.2%. Trading volumes of SHFE 1510 copper saw a rise of 348,000 lots while positions fell 39,922. Trading volumes of copper futures grew 591,000 lots with positions down 51,522.

On Tuesday, spot copper traded at a discount of RMB 50-150/mt in Shanghai market. Mainstream prices were RMB 39,320-39,640/mt for standard-quality copper and RMB 39,380-39,680/mt for high-quality copper.

Some speculators sourced cheaper copper in market early morning. Sellers rush to ship goods out after price rises in SHFE copper. This helped spot discounts to expand with spot discounts on high-quality copper above RMB 100/mt. Therefore, price gap between high-quality and standard-quality copper narrowed. Price as high as RMB 40,000/mt discouraged buyers. Traders hunted cheaper copper for term contracts. Thus, trades declined after a rally on Aug. 11.

Alumium

SHFE 1510 aluminum fluctuated between the 5-day and 10-day moving averages after opening at RMB 12,080/mt on Tuesday. The contract touched a session high of RMB 12,110/mt, but then fell back to RMB 12,010/mt as Chinese yuan softened against the US dollar considerably after the PBOC announced notice on RMB exchange rate policy. Finally, SHFE 1510 aluminum ended up RMB 75/mt or 0.63% at RMB 12,040/mt. Positions were down 6,170 lots to 147,000 lots.

Aluminum prices were mainly between RMB 11,970-11,990/mt in Shanghai on Tuesday, discounts of RMB 10-30/mt over August aluminum on the SHFE, versus RMB 11,970-11,990/mt in Wuxi and RMB 11,970-11,980/mt in Hangzhou. Sellers in spot market became eager to sell at highs after SHFE aluminum rallied to near RMB 12,000/mt. Higher prices depressed downstream buying. Only traders were active in the market. In the afternoon, spot prices followed SHFE aluminum down to RMB 11,960-11,970/mt, with trading thin.

Lead

SHFE 1510 lead opened at RMB 13,055/mt for night trading Monday and grew to RMB 13,320/mt. Later, the price moved around RMB 13,190/mt before closing at RMB 13,185/mt, jumping RMB 270/mt.

US dollar posted a growth due to China’s move to devalue Chinese yuan on Tuesday. SHFE lead fell to RMB 13,120/mt and then rolled backed the losses. Finally, the price closed at a high of RMB 13,250/mt, rising RMB 335/mt or 2.59%.

Nanfang brand initially quoted RMB 13,330/mt but later fell to RMB 13,300-13,310/mt in Shanghai. Consequently, spot premiums slipped to RMB 140/mt over SHFE 1510 lead contract. Traded prices were RMB 13,290/mt for Humon brand, compared with RMB 13,270/mt for Yuteng and YT brands.

Shandong Humon Smelting and Hechi Nanfang Nonferrous Metals Group still moved goods out Aug. 11 while downstream buyers waited for further price falls after spot prices soared on Tuesday. As a result, trades were left softening.

Zinc

SHFE 1510 zinc contract prices opened at RMB 14,540/mt Monday evening, then climbed to RMB 14,740/mt, and closed at RMB 14,655/mt. SHFE 1510 zinc contract prices fluctuated between RMB 14,630-14,730/mt on Tuesday, and closed at RMB 14,680/mt, up RMB 235/mt or 1.63%. Trading volumes increased 42,744 to 233,152 lots, and total positions decreased 8,198 to 162,474. SHFE 1509 zinc contract prices are expected to fall. 

#0 zinc prices were between RMB 15,030-15,080/mt, RMB 340-380/mt above SHFE 1510 zinc contract prices last Friday. #1 zinc prices were RMB 15,010/mt. Spot premiums of imported #0 zinc were RMB 300/mt against SHFE 1510 zinc contract prices. SHFE 1510 zinc contract prices opened at RMB 14,655/mt, then hovered around RMB 14,700/mt. Smelters sold modestly, with registered #0 zinc supply growing, weighing on spot premiums. Supply of non-registered and imported zinc remained limited, with the price spread between imported zinc and domestic registered zinc narrowing further. Downstream buyers stayed on the sidelines, leaving overall transactions quiet. Prices moved sideways in the afternoon, with spot premiums of RMB 340-360/mt, and RMB 15,000/mt for imported zinc.

Tin

SHFE 1509 tin opened at RMB 109,760/mt on Tuesday. The contract hovered around RMB 109,400/mt for most of the day, and ended the day up RMB 680/mt or 0.63% at RMB 108,490/mt. Trading volumes were up 384 lots to 1,200 lots, and positions were down 84 lots to 1,506 lots.

In Shanghai spot tin market, mainstream traded prices inched up to RMB 107,800-109,000/mt on August 11, tracking SHFE tin. Goods from Yunnan Tin Group traded at RMB 108,800-109,000/mt.

Nickel

SMM #1 nickel prices were between RMB 82,600-883,500/mt. Premiums of Jinchuan nickel against the most actively traded contracts on the Wuxi electronic trading were RMB 200/mt in the morning. Spot nickel prices rose as nickel futures prices surged in the afternoon, but trading was sluggish. Traders lowered their quotes, with mainstream traded prices between RMB 82,600-83,000/mt. Traders sold proactively in the afternoon as nickel futures prices fell, with premiums of Jinchuan nickel against the most actively traded contracts on the Wuxi electronic trading down to zero. A few traders purchased at lows, and downstream buyers purchased as needed, with traded prices between RMB 82,400-82,900/mt. Jinchuan raised price by RMB 2,700/mt to RMB 83,400/mt.