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SMM Base Metals Market Daily Review (2015-8-25)
Aug 26,2015 10:47CST
SMM Comments
SHFE 1510 copper contract opened lower at RMB 37,980/mt Monday night.

SHANGHAI, Aug. 26 (SMM) – 


SHFE 1510 copper contract opened lower at RMB 37,980/mt Monday night, but climbed soon after finding support at to RMB 37,870/mt, to finish the session at RMB 38,680/mt, up RMB 350/mt. Positions increased 350, and trading volumes were around 370,000 lots. 

SHFE copper extended Monday night’s growing momentum and once soared to RMB 39,090/mt but later the red metal dived to RMB 38,430/mt as China’s stocks fell below 3,000. The contract ended the day at RMB 38,820/mt, rising RMB 490/mt or 1.28%. Positions jumped 20,584 to 195,670 while trading volumes stayed flat at 660,000 lots.

The slump in Chinese stock market fueled concerns over the world’s second largest economy. Expectation for more depreciation in Chinese yuan lured buyers to sell LME copper and buy SHFE copper. Positions of SHFE 1511 copper were only 6,000 less than SHFE 1510 copper. 

On Tuesday, spot copper settled between discounts of RMB 50/mt and premiums of RMB 10/mt in Shanghai market. Standard-quality copper quoted RMB 39,020-39,140/mt, versus RMB 39,060-39,200/mt for high-quality copper.

Cargo holders turned more willing to sell, leaving spot supply abundant in market. Those traders tended to hold prices firm in the morning. But later, spot premiums disappeared and copper was throwed into discounts again. As such, trading activity was active between traders. But downstream buyers watched from the sidelines. 


SHFE 1510 aluminum opened at RMB 11,855/mt on Tuesday. The most active contract ranged RMB 11,850-11,910/mt before ending up RMB 40/mt or 0.34% at RMB 11,870/mt. The rebound was driven by short-covering. Trading volumes were down 13,500 lots to 41,970 lots, and positions were down 5,340 lots. 

SHFE 1509 aluminum moved around RMB 11,860/mt on Tuesday. Aluminum prices were mainly between RMB 11,770-11,790/mt in Shanghai, discounts of RMB 70-90/mt over September aluminum on the SHFE, versus RMB 11,770-11,800/mt in Wuxi and RMB 11,760-11,780/mt in Hangzhou. Trading was mainly among traders. In the afternoon, traders raised offers by RMB 10/mt to RMB 11,780-11,790/mt after SHFE aluminum rose, with trading thin. 


SHFE 1510 lead opened Monday evening session at RMB 12,980/mt and then expectation for Chinese yuan depreciation lured investors to sell LME copper and buy SHFE copper. And hence, SHFE lead soared to RMB 13,165/mt as longs entered market and closed the session at RMB 13,120/mt, down by RMB 10/mt. Trading volumes fell 2,492 to 4,456 lots while positions increased 154 to 17,896.

The PBOC lowered the central parity of RMB:USD by over 100 on Tuesday. As such, SHFE lead once advanced to RMB 13,240/mt but later rolled back some gains due to Chinese falling shares, to close at RMB 13,140/mt, up RMB 10/mt. Trading volumes totaled 8,852 lots while positions declined 182 to 17,560.

Nanfang brand was offered at RMB 13,290-13,300/mt in Shanghai, RMB 80-90/mt higher than SHFE 1510 lead. Traded prices were RMB 13,280-13,290/mt for Humon brand, versus RMB 13,270/mt for Jinyuteng brand and RMB 13,260/mt for Shungyan brand (packed in iron).

Nanfang and Humon brands goods were shipped out Tuesday. But spot supply remained tight in market and cheap goods were hard to source. Downstream buyers increased some purchase after SHFE lead prices grew. The supply shortage in Henan also helped to boost trades in Shanghai. Thus, trades picked up slightly on Aug. 25.


SHFE 1510 zinc contract prices opened at RMB 14,250/mt Monday evening, then dropped to RMB 14,280/mt, but later rose to RMB 14,400-14,500/mt, and closed at RMB 14,445/mt, down RMB 55/mt or 0.38%. SHFE 1510 zinc contract prices dipped to RMB 14,325/mt on Tuesday then rallied to RMB 14,450/mt. As China’s A-share plunged in the afternoon, SHFE 1510 zinc contract prices fell and closed at RMB 14,360/mt, down RMB 135/mt or 0.93%. Trading volumes increased 274 to 170,648 lots, and total positions decreased 3,308 to 129,016. SHFE 1510 zinc contract prices will look for price floor.  

#0 zinc prices were between RMB 14,730-14,880/mt, RMB 300-450/mt above SHFE 1510 zinc contract prices. #1 zinc supply was tight, with prices of RMB 14,650-14,660/mt. Spot premiums of imported #0 zinc were RMB 50-120/mt against SHFE 1510 zinc contract prices. Market players purchased at lows as zinc prices fell, but supply of a few brands was limited. Traders held their quotes firm, increasing spot premiums, but trading was limited. Traded prices were between RMB 14,690-14,830/mt in the afternoon.


In Shanghai spot tin market, traders rushed to sell, while most processors held to the sidelines. This sent mainstream traded prices down to RMB 102,500-103,500/mt on August 25. Some goods used for arbitrate between futures and spot market traded much lower to RMB 102,000-102,500/mt as holders were eager to take profit on the SHFE. 


SMM #1 nickel prices were between RMB 74,600-75,300/mt. Discounts of Jinchuan nickel against the most actively traded contracts on the Wuxi electronic trading were RMB 200/mt in the morning. Jinchuan did not adjust prices yesterday. Downstream buyers replenished stocks actively, with traded prices between RMB 74,800-75,300/mt. Discounts of Jinchuan nickel against the most actively traded contracts on the Wuxi electronic trading rose to RMB 300/mt in the afternoon. Traders sold proactively, while purchases were mainly made by downstream producers, with traded prices between RMB 73,200-73,600/mt.

SHFE copper prices
SHFE aluminum prices
SHFE lead prices
SHFE zinc prices
Shanghai tin prices
Shanghai nickel prices

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