SMM Price Outlook for Base Metals on SHFE (Oct. 23, 2017)

SMM Morning Meeting Minutes: LME copper: opened at $14,426/mt, hit a high of $14,483/mt, a low of $14,399.5/mt, and closed at $14,425.5/mt, down 0.36%. Trading volume was 17,000 lots, with open interest at 258,000 lots, a decrease of 1,360 lots from the previous trading day, reflecting long liquidation. The most-traded SHFE copper 2611 contract: opened at 109,280 yuan/mt, hit a high of 109,790 yuan/mt, a low of 109,280 yuan/mt, and closed at 109,420 yuan/mt, up 0.11%. Trading volume was 23,000 lots, with open interest at 184,000 lots, a decrease of 975 lots from the previous trading day, reflecting long liquidation.

The EU Council gave final approval on September 24 to temporary trade measures expected to make about 80% of Armenian exports to the bloc duty-free. The annex covers CN 7202 ferro-alloys and CN 2825 other metal oxides, bringing qualifying Armenian ferromolybdenum and molybdenum oxide within scope. SMM learned that European inquiries and procurement demand for Armenian ferromolybdenum increased today as the market priced in the expected tariff relief, potentially improving the material’s competitiveness. As of September 30, the regulation was still awaiting signature and publication in the EU Official Journal. It will enter into force the following day and apply for two years, meaning the current demand pickup mainly reflects advance positioning ahead of implementation.