SHANGHAI, Aug. 13 (SMM) –
SHFE 1510 copper opened lower at RMB 39,220/mt for night trading Tuesday and finally closed at RMB 38,810/mt, down by RMB 70/mt, off 0.18%. Trading volumes were 359,000 lots and positions declined 3,372.
Copper for October delivery moved around RMB 38,900/mt on Wednesday with SHFE/LME copper price ratio above 7.65. In the afternoon business, SHFE copper touched a high of RMB 39,500/mt and ended at RMB 39,350/mt, up by RMB 470/mt or 1.21%. Trading volumes of the October copper dropped 31,956 lots and positions fell 10,204. Trading volumes of copper futures totaled 195,000 lots and positions slipped 19,002.
In Shanghai market, traded prices were RMB 39,040-39,160/mt for standard-quality copper and RMB 39,060-39,240/mt for high-quality copper on Wednesday. Spot copper discounts widened to RMB 180-80/mt against SHFE 1508 copper.
LME copper slumped to a record low of USD 5,063/mt while SHFE copper resisted declines, expanding SHFE/LME copper price ratio above 7.7. Imported copper sold well in market and spot supply stayed abundant in the morning with spot discounts increasing further. In the afternoon, some traders hunted cheaper spot copper and sold copper futures to book profits and for term contracts. At the same time, downstream producers still bought for immediate consumption.
China’s yuan dropped at a faster pace on Wednesday. SHFE 1510 aluminum started at RMB 12,065/mt and extended Tuesday night’s rising momentum to touch RMB 12,165/mt. The contract finally ended at RMB 12,135/mt, growing RMB 95/mt or 0.79%. Trading volumes slipped 1,112 to 49,638 lots and positions also dropped 2,484 to 144,000.
Aluminum prices were mainly between RMB 11,960-11,980/mt in Shanghai on Wednesday, discounts of RMB 20-40/mt over August aluminum on the SHFE, versus RMB 11,950-11,980/mt in Wuxi and RMB 11,960-11,980/mt in Hangzhou. Poor downstream buying caused spot discounts to widen. In the afternoon, some deals closed at RMB 11,970/mt, and trading waned.
SHFE 1510 lead outperformed LME lead during Tuesday evening session and this further expanded SMM/LME lead price ratio. SHFE lead started at RMB 13,180/mt and finished RMB 55/mt lower at RMB 13,110/mt with the low-end price at RMB 13,100/mt.
China cut the value of the yuan for a second day, which triggered expectation for China’s reserve ratio cut. This supported base metals on the SHFE. SHFE lead regained Aug. 11’s losses due to rising longs and reducing shorts. The contract finally ended at RMB 13,285/mt, gaining RMB 90/mt. Trading volumes surged to 9,050 lots but positions fell 328 to 18,230.
In Shanghai market, Nanfang brand was offered at RMB 13,310/mt, a premium of RMB 100/mt to SHFE 1510 lead, versus RMB 13,290-13,300/mt for Hanjiang and Humon brands and RMB 13,270-13,280/mt for YT brand.
Few lead smelters moved goods out as LME lead and SHFE lead contracts prices diverged from each other. Downstream buyers noted that SHFE lead contract prices will fall back following LME lead prices. Thus, those buyers showed little interest on Aug. 12.
SHFE 1510 zinc contract prices opened at RMB 14,520/mt Tuesday evening, then touched RMB 14,640/mt, but fell back to RMB 14,500/mt, and closed at RMB 14,510/mt, down RMB 160/mt. SHFE 1510 zinc contract prices touched RMB 14,885/mt on Wednesday, and closed at RMB 14805/mt, up RMB 135/mt or 0.92%. Trading volumes increased 88,436 to 321,588 lots, and total positions decreased 7,204 to 155,270. SHFE 1509 zinc contract prices will have limited room for rebound.
#0 zinc prices were between RMB 15,070-15,120/mt, RMB 330-380/mt above SHFE 1510 zinc contract prices Wednesday. #1 zinc prices were RMB 15,070/mt. Spot premiums of imported #0 zinc were RMB 300-320/mt against SHFE 1510 zinc contract prices. SHFE 1510 zinc contract prices opened at RMB 14,510/mt, and hovered around RMB 14,740/mt during 10:30-11:30, and closed at RMB 14,745/mt. Smelters sold modestly, with registered #0 zinc supply limited, and spot premiums largely unchanged. Trading for non-deliverable brands and imported zinc was quiet, with downstream buying interest weak. SHFE 1510 zinc contract prices extended gains in the afternoon, fluctuating around RMB 14,730/mt and rose to RMB 14,800/mt at the end of trading, boosting #0 zinc prices and causing spot premiums to narrow to RMB 300-350/mt. #0 zinc was traded at RMB 15,040-15,070/mt.
The across-the-board decline in SHFE base metals sparked strong wait-and-see mood in Shanghai spot tin market. As a result, mainstream traded prices dropped to RMB 107,500-109,000/mt on August 12. Goods from Yunnan Tin Group traded at RMB 108,500-109,000/mt.
SMM #1 nickel prices were between RMB 81,200-82,000/mt. Discounts of Jinchuan nickel against the most actively traded contracts on the Wuxi electronic trading were RMB 200/mt in the morning. Nickel futures prices slumped on RMB depreciation, pushing down spot nickel prices. Downstream buyers stayed on the sidelines, with traded prices between RMB 81,000-81,400/mt. Jinchuan nickel price remained below the most actively traded contracts on the Wuxi electronic trading, but SHFE nickel prices increased. Import window for nickel closed on RMB depreciation, leaving domestic spot nickel price firm. Downstream buyers remained cautious, while traders entered the market, increasing transactions, with traded prices between RMB 81,500-81,900/mt. Jinchuan raised price by RMB 2,100/mt to RMB 81,300/mt.