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SMM Base Metals Market Daily Review (2015-8-27)
Aug 28,2015 09:45CST
price review forecast
SHFE 1511 copper opened lower at RMB 38,500/mt in response to falling LME copper on Wednesday night.

SHANGHAI, Aug. 28 (SMM) – 


SHFE 1511 copper opened lower at RMB 38,500/mt in response to falling LME copper on Wednesday night. The contract then advanced to RMB 38,600/mt but later drifted lower to RMB 38,090/mt due to stronger dollar and sell-offs. The red metal finished down RMB 780/mt or 2.00% at RMB 38,290/mt. Positions declined 5,794 and trading volumes were about 120,000 lots.

Crude oil prices headed for stability and US dollar moved on the weak side on Thursday. Hence, SHFE 1511 copper opened RMB 200/mt higher at RMB 38,160/mt and then reached RMB 38,870/mt as China’s A-shares opened 2% higher Thursday. The contract closed the day at RMB 38,740/mt, slipping RMB 330/mt or 0.84%. Positions declined 116 and trading volumes totaled 270,000 lots, falling 10,000 lots.

On Thursday, spot copper traded at discounts of RMB 20-80/mt over SHFE 1509 copper in Shanghai market. Standard-quality copper quoted RMB 38,800- 39,000/mt and RMB 38,840 -39,060/mt for high-quality copper.

SHFE copper fell back following a rally. Less producers entered market late this month. Some hedged copper flowed into market and thus spot copper was throwed into discounts. Some buyers went bargain hunting then. Standard-quality quoted the same with high-quality copper while hydro-cooper prices held firm. Downstream buyers purchased to need.  


SHFE 1511 aluminum climbed to RMB 11,900/mt after opening higher at RMB 11,850/mt on Thursday. The contract fell back to RMB 11,820/mt later. Chinese A-share market rose sharply in the afternoon, allowing the most active contract to rebound before ending up RMB 20/mt or 0.17% at RMB 11,875/mt. Trading volumes were down 8,732 lots to 21,710 lots, and positions were up 2,552 lots to 120,000 lots. The 5-day moving average will continue to pose strong resistance.  

Aluminum prices were mainly between RMB 11,775-11,800/mt in Shanghai on Thursday, discounts of RMB 60-85/mt over September aluminum on the SHFE, versus RMB 11,780-11,800/mt in Wuxi and RMB 11,780-11,790/mt in Hangzhou. Cargo holders held offers firm, allowing spot discounts to narrow. Downstream consumption was moderate. In the afternoon, traded prices were RMB 11,780/mt. Aluminum stocks at China’s five major markets dropped 32,000 mt week-on-week to 942,000 mt on August 27, due mainly to fewer cargos arriving. 


SHFE 1510 lead gapped lower at RMB 13,145/mt for night trading Wednesday and then ranged between RMB 13,115-13,275/mt, to close at RMB 13,190/mt, losing RMB 110/mt. Trading volumes declined 4,416 to 2,810 lots and positions also dropped 84 to 17,234.

The most actively trade contract broke out above RMB 13,300/mt during Thursday trading session as iron ore, rebar and rubber futures prices grew quickly after the open. Then the contract ranged between RMB 13,260-13,300/mt and increased near session’s end responding to a rise in Chinese stock market, to close at RMB 13,355/mt, up RMB 55/mt. Trading volumes were about 6,356 lots while positions decreased 634 to 16,684 with shorts exiting market.

SMM/LME lead price ratio already stands above 8, but expectation for more depreciation in yuan exists and less lead imports flow into China. SHFE 1510 lead does not suffer sell-offs. As such, SHFE 1510 lead should test resistance at RMB 13,350/mt in short term.

On Thursday, mainstream traded prices were RMB 13,350/mt for Chengyuan brand in Shanghai, RMB 50/mt higher than SHFE 1510 lead, versus RMB 13,340/mt for Hanjiang and Humon brands.

Less shipment arrived and thus lead smelters moved few goods. Only West Mining shipped goods out. Spot premiums narrowed. Trades were active in buying as hedged goods were hard to flow into market. Supply shortage put a brake on trades. Downstream consumption remained slack late this month. Trades were thus left light. 


SHFE 1510 zinc contract prices opened at RMB 14,340/mt Wednesday evening, then hovered around RMB 14,400/mt and closed at RMB 14,395/mt, down RMB 105/mt or 0.72%. SHFE 1510 zinc contract prices fluctuated between RMB 14,420-14,450/mt on Thursday morning. As China’s A-share market rose in the afternoon, SHFE 1510 zinc contract prices rallied and closed at RMB 14,470/mt, down RMB 30/mt or 0.21%. Trading volumes increased 49,918 to 153,528 lots, and total positions decreased 6,168 to 121,252.

#0 zinc prices were between RMB 14,690-14,750/mt, RMB 270-330/mt above SHFE 1510 zinc contract prices. #1 zinc supply was tight, with prices of RMB 14,620-14,630/mt. Spot premiums of imported #0 zinc were RMB 0-120/mt against SHFE 1510 zinc contract prices. Spot premiums weakened on sufficient supply, with the price spread between domestic and imported zinc narrowing further. Trading was quiet in the morning, with traded prices between RMB 14,640-14,780/mt in the afternoon. Smelters and traders sold proactively, but purchases were limited.


In Shanghai spot tin market, prices tracked SHFE tin down further. Mainstream traded prices were RMB 101,000-102,000/mt on August 27. Wait-and-see mood dominated the market. Goods from Yunnan Tin Group traded at RMB 101,800-102,200/mt.  


SMM #1 nickel prices were between RMB 74,300-75,700/mt. Discounts of Jinchuan nickel against the most actively traded contracts on the Wuxi electronic trading widened to RMB 900/mt in the morning. Russian nickel was popular, but overall transactions were lackluster, with traded prices between RMB 74,400-75,400/mt. Premiums of Jinchuan nickel narrowed to RMB 600/mt in the afternoon. Jinchuan Group left price unchanged for three days in a row, allowing Jinchuan nickel supply to decrease, with traded prices between RMB 74,400-75,500/mt. 


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

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