SHANGHAI, Aug. 27 (SMM) – SHFE 1510 copper contract gapped higher at RMB 39,320/mt Tuesday night, and climbed to RMB 39,600/mt before ending the session RMB 39,540/mt, up RMB 990/mt. Positions decreased 9,710, and trading volumes were around 200,000 lots. SHFE 1511 copper contract shifted to the most traded one.
SHFE 1511 copper started with a negative gap at RMB 39,220/mt on Wednesday and then grew thanks to a growth in Chinese stock market. But later the red metal fell back as Chinese stocks posted drops and as shorts sold off SHFE copper. The contract finally closed the day at RMB 38,710/mt, up RMB 290/mt or 0.75%. Trading volumes saw a decline of over 100,000 lots while positions grew 2,980 to 191,986.
Spot copper discounts widened to RMB 0-70/mt against SHFE 1509 copper in Shanghai on Wednesday. Mainstream traded prices were RMB 39,150-39,300/mt for standard-quality copper and RMB 39,180 -39,350/mt for high-quality copper.
The People’s Bank of China (PBOC) announced to cut the reserve requirement ratio (RRR) and lower key interest rates, which, however, failed to improve market sentiment effectively. Consequently, the slid in Chinese A-share market persisted. And SHFE copper thus fell from high. Cargo holders were active in selling at highs.
In the latter half trading of the day, spot copper all turned into discounts, which seemed to further widen. Traders bought spot copper and sold copper futures. Few downstream buyers entered market. Wait-and-see loomed market and trades were left quiet.
