SMM Daily Review (Aug. 6)

SHANGHAI, Aug. 7 (SMM) --

    Copper:

    The employment and non-manufacturing data from the US was weak, dragging down US stocks. The US dollar index soared to 77.80, but closed at 77.56. Negatively affected by falling US stocks, LME copper prices moved up to USD 6,037/mt, and then soared to a new high of USD 6,236/mt, and then closed at USD 6,195/mt. On Thursday morning, LME copper prices moved downward to USD 6,020/mt, leading to SHFE copper prices moving in the low level, and LME copper prices recovered to USD 6,100/mt in the afternoon, driving up SHFE copper prices and helping narrow the daily declines. The non-farm employment report from the US will likely show weak performance with the approach of weekend, so LME copper prices will likely fluctuate around USD 6,000/mt in the short term.

    Market rumors report SHFE copper inventories will likely increase by more than 10,000mt during this weekend, generating market concerns over demand. SHFE copper prices might need further corrections when moved up to RMB 50,000/mt. In spot copper market, spot premiums appeared and increased to RMB 80-100/mt from RMB 50/mt given significant declines in SHFE copper prices. Slight discounts appeared for parity copper. Traded prices for spot copper were in the RMB 47,600-47,800/mt range, down RMB 1,000/mt compared to yesterday. In the afternoon, spot discounts appeared again with the recovery of SHFE copper prices. Traded prices for spot copper rebounded above RMB 48,000/mt, and premium copper has been unavailable below RMB 48,000/mt. Today, trading activities reported the most active performance during this week, and copper prices bottomed out in the afternoon, boosting market confidence, so market players believe SHFE copper prices will open high tomorrow.

    Aluminum:

    SHFE aluminum prices moved around RMB 15,300/mt. Today, the long positions of Chalco International Trading increased their positions significantly, boosting market confidence. In the morning, offers were RMB 15,250/mt for spot aluminum, with slight discounts. Offers were RMB 15,220/mt for imported Rusal aluminum in the market, exerting negative impact on domestic aluminum. Market transactions increased slightly with the approach of weekend. Aluminum prices are expected to above RMB 15,300/mt during this week.

    Lead:

    In Shanghai lead market, SMM lead prices remained unchanged. Low copper and lead prices in the morning depressed market sentiment and generated the market cautiousness. Smelters still kept their offers firm at RMB 14,000/mt, but traded prices have fallen to RMB 13,800/mt, with spot discounts widened to RMB 200/mt.

    Zinc:

    SHFE zinc prices fluctuated widely, and closed at RMB 15,000/mt, with limited downward room. In spot zinc market, SMM offers were RMB 14,850-14,950/mt for #0 zinc, but spot zinc prices were still RMB 500/mt lower than SHFE three-month contract zinc prices. Although inquiries increased in the market today, traders were still waiting for lower prices. SHFE zinc prices recovered in the afternoon, and offers for spot zinc picked up as well, and trading activities increased at lower prices. Spot zinc prices are expected to move around RMB 15,000/mt.

    Tin:

    In Shanghai tin market, SMM tin prices were in the RMB 115,500-118,000/mt range. Market offers moved up gradually, but trading activities were lackluster. Smelters held a firm attitude, but market demand remained weak.

    Nickel:

    Jinchuan Group raised nickel ex-works prices by RMB 7,000/mt to RMB 153,000/mt today, but traders became active in moving cargos in an effort to collect cash given increasing risks, so they reduced their offers gradually to RMB 148,000-149,000/mt, much lower than ex-works prices for Jinchuan nickel today. Costs of imported nickel moved up increasingly, leading to the tightness of imported resources.

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