SHANGHAI, Nov. 17 (SMM) – SHFE 1601 copper started last Friday night session at RMB 36,490/mt and moved lower to RMB 36,180/mt, to close at RMB 36,340/mt, down RMB 140/mt or 0.38%. Positions were up 3,054 to 338,014 and trading volumes were around 195,000 lots.

SHFE copper moved higher to above RMB 3,6280/mt on Monday but later the red metal fell to RMB 35,960/mt due to news of Codelco slashing its 2016 premium to China to USD 98/mt, to end at RMB 36,030/mt, down by RMB 450/mt or 1.23%. Positions grew 1,608 to 537,316 lots with trading volumes down 200,000 lots.

In Shanghai, spot copper quoted at premiums of RMB 50-120/mt over SHFE 1511 copper on November. Mainstream prices were RMB 36,270-36,400/mt for standard-quality copper and RMB 36,300-36,470/mt for high-quality copper.

SHFE copper moved at lows and cargo holders started give price offers for SHFE 1512 copper. And spot copper quoted between discounts of RMB 50/mt and premiums of RMB 20/mt in the morning. Widening price gap between SHFE 1511 and 1512 copper triggered wait-and-see sentiment among traders and downstream buyers. Spot copper prices gradually fell to discounts of RMB 0-60/mt with ample supply and soft buying. Today is the last trading day for SHFE 1511 copper. And spot discounts are expected after the delivery of SHFE 1511 copper.

60% market players see LME copper to fall below USD 4,700/mt this week and SHFE copper to slide below RMB 36,000/mt. A strong recover in US labor market raised bets of US rate hike this year. And dollar thus stabilizes at 99 and challenges 99.5. Besides, crude oil prices should fall below USD 40/bbl, curbing copper prices. Economic figures issued lately from China further showed economy slowdown, still mirroring low demand. Overall operating rate picked up slightly by the end of this year in China, SMM surveys. Moreover, refined copper production in China hit a new high in October, boding ill for copper prices.

7% investors expect LME copper to return to USD 4,820/mt this week and SHFE 1601 copper to grow to RMB 36,500/mt. US recent-issued economic figures still point to inflation pressures. US dollar fell back after meeting resistance at 100 and gold prices got a boost after Pairs attacks. Crude oil prices move around USD 40/bbl. Copper and crude oil price may seek support later should the geopolitical tensions in the Middle East intensify further.

The remaining 33% respondents believe that LME copper will hover between USD 4,720-4,820/mt this week and SHFE copper will range between RMB 35,500-36,500/mt. Total positions have grew to a previous high following continuous slump in SHFE copper and short-covering and exit of longs will allow SHFE copper to move at lows. In China’s spot market, cargo holders attempt to hold prices firm and on the other hand, downstream bearish buyers stay out of market, depressing premiums during the delivery period. Spot copper will return to discounts after the delivery, containing market sentiment.