SMM Daily Review (Aug. 5)

SHANGHAI, Aug. 6 (SMM) --

    Copper:

    SHFE copper prices opened high, but moved upward at a slower pace compared to LME copper prices. SHFE copper prices fluctuated around daily average line in the morning, but plunged negatively affected by LME copper market in the afternoon, with daily fluctuation range of RMB 500-600/mt. In spot copper market, spot discounts were RMB 200/mt for premium copper, RMB 250/mt for parity copper, and RMB 350-400/mt for hydro-copper. Copper prices kept moving in the RMB 48,500-48,800/mt range. Copper prices have set new highs for several times since August, and transactions were better than yesterday due to positive economic conditions, including some speculative activities. In the afternoon, spot premiums were RMB 50/mt given plunged SHFE copper prices, and traded prices performed steadily at RMB 48,000/mt despite of scarce trading volumes. The spot premiums appeared in the market, indicating market players were still confident in market outlook.

    Aluminum:

    SHFE aluminum prices soared for second time in the morning and received great support at RMB 15,000/mt. However, arbitrageurs remained quiet due to nearly no price spread among different contracts. Spot aluminum prices soared to RMB 15,200/mt, and continued to move upward following SHFE aluminum price trend. Although consumers felt hard to accept soaring prices, spot suppliers were unwilling to reduce prices. In the afternoon, spot aluminum prices fell below RMB 15,200/mt, with limited transactions. The test range for aluminum prices has risen for several times, and consumers were trying to adapt and accept higher aluminum prices under positive economic environment.

    Lead:

    In Shanghai lead market, SMM lead prices increased by RMB 100/mt cautiously to RMB 14,000-14,100/mt, and struggles between long and short positions appeared at RMB 14,000/mt. A portion of large lead end-users signed long-term contracts to control their costs, leading to limited spot supply in the market. Some brands lead smelters kept their offers firm though it is difficult to move goods at higher prices, but medium and small smelters were active in sell goods in an effort to collect cash, so lead prices will unlikely increase above RMB 14,000/mt.

    Zinc:

    SHFE zinc prices fluctuated widely. All contracts prices stabilized above RMB 15,000/mt, but with shortages of upward momentum. Struggles between long and short positions became intense above RMB 15,000/mt. In spot zinc market, SMM zinc prices rose by RMB 100/m to RMB 14,900-15,000/mt. In the morning, spot discounts have widened to RMB 500/mt, and downstream consumers still held a wait-and-see attitude except some arbitrageurs. In the afternoon, spot discounts narrowed significantly due to plunged SHFE zinc prices. Limited imported zinc flowed into the market, but overall transactions were scarce.

    Tin:

    In Shanghai tin market, tin prices increased by RMB 1,500/mt to RMB 115,000-117,000/mt. Traders remained reluctant to move cargos given the low availability of low-priced goods.

    Nickel:

    In Shanghai nickel market, Jinchuan Group raised nickel ex-works prices by RMB 5,000/mt to RMB 146,000/mt, with total price hikes of RMB 15,000/mt during four days. Offers were RMB 147,000-148,000/mt for Jinchuan brand nickel. Currently, traders adopted a cautious attitude towards offers for Jinchuan brand nickel, and profit margins for traders narrowed. Imported nickel prices increased to RMB 144,000/mt, with losses greater than RMB 12,000/mt.

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