SMM Copper Market Daily Review (2015-10-14)

SHANGHAI, Oct. 15 (SMM) – A slip in LME copper allowed SHFE 1512 copper to start lower at RMB 39,700/mt on Tuesday night. SHFE copper tested a low of RMB 39,540/mt and later advanced to RMB 39,930/mt. But crude oil prices ended down almost 2% and this led to SHFE copper to retreat all the gains. Finally, the red metal closed RMB 120/mt or 0.3% lower at RMB 39,650/mt. Positions fell 302 to 231,454 with trading volumes around 185,000 lots.

SHFE copper refreshed Wednesday’s new low to RMB 39,540/mt due to downbeat expectation for China’s PPI and CPI data. Later, the contract rebounded thanks to Chinese stock rally but then fell back again due to resistance at the 5 and 20-day moving averages and a slump in Chinese stock. The red metal finally ended down RMB 140/mt or 0.35% at RMB 39,630/mt. Positions saw a slip of 1,016 to 230,740 and trading volumes totaled 395,000 lots.

In Shanghai market, spot copper was largely offered between discounts of RMB 10/mt and premiums of RMB 50/mt on Wednesday. Mainstream prices were RMB 39,700-39,900/mt for standard-quality copper and RMB 39,720-39,940/mt for high-quality copper.

Cargo holders quoted between discounts of RMB 20/mt and premiums of RMB 30/mt early Wednesday morning. This lured a large portion of traders to enter market, pushing transactions up, which also allowed high-quality copper to invert to premiums of RMB 40-50/mt. Standard-quality copper also returned to premiums later. In the afternoon business, trading declined but cargo holders held prices firm. Traders cut purchase slightly. Moderate premiums are likely to attract some bullish term buyers with the coming delivery date while downstream purchase was little.