SMM Daily Review - 2009/12/16 Copper Market

SHANGHAI, Dec. 17 (SMM) -- SHFE copper markets opened low but moved higher in morning trade. After a new contract month starts, prices of SHFE copper prices, from 1001 contract to 1004 contract were nearly flat, and the price gap between different contracts on the SHFE copper market was very limited. SHFE current-month contract copper prices reached as high as RMB 55,450/mt, with prices ending at RMB 55,330/mt. SHFE 1003 contract copper prices touched as high as RMB 55,450/mt, and closed at RMB 55,320/mt. Copper prices in the futures market weakened at noon, but moved upward in later trading. Turnover rate dropped, and positions only experienced slight increases, indicating a wait-and-see attitude.

In the spot market, discounts re-emerged in the market after the beginning of a new contract month. In morning business, premiums for high-grade copper were RMB 50/mt, with sparse inquiries, weighing premiums down to RMB 20/mt, even as low as RMB 0/mt. In this context, standard-grade copper reported discounts in the RMB 30-80/mt range. Mainstream traded prices were in the RMB 55,300-55,400/mt range, with low trading sentiment, and a wait-and-see attitude dominated the market. Spot traded prices fell back to the RMB 55,250-55,350/mt in the afternoon following a weaker copper price in the futures market. Domestic-goods holders were in dilemma, hoping to sell more goods with prices above RMB 55,000/mt, and meanwhile unwilling to move goods with discounts. Importers were active to adjust premiums and discounts for fears that highly-fluctuating copper prices in the futures market would expand discounts further. Price cuts of imported copper depressed traded prices of domestic goods.

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