SMM Daily Review (Aug. 7)

SHANGHAI, Aug. 10 (SMM) --

    Copper:

    SHFE copper prices moved in the low level with a decline rate of over 1%. SHFE copper prices have fluctuated above 5-day average line for three days, and fell to below this line on Friday. The situation of strong soon-to-empire contract and weak forward contract remained in the market, and SHFE copper prices will likely soar above RMB 45,300/mt. In spot copper market, copper prices were RMB 47,250-47,450/mt today, and limited spot premiums appeared in the market. Spot premiums for copper with Guixi brand were only RMB 80/mt, and traded prices for parity copper leveled off, with good transactions. Today, purchasing interest of some consumers grew significantly for stock replenishment with the approach of weekend, as they have adopted a wait-and-see attitude with regard to continuous surges in copper prices during the first half of this week, and copper prices have corrected for two days.

    Aluminum:

    LME aluminum prices fell to USD 1,985/mt after 5-day rise due to strengthened US dollar and falling crude oil prices. However, market insiders believe any downward room for SHFE aluminum prices will be limited and will likely fall to RMB 14,850/mt with support from positions of domestic first-class brands aluminum, if LME aluminum prices receive support at USD 1,900/mt. In spot aluminum market, aluminum prices stabilized at RMB 15,000/mt reluctantly in the morning as SHFE aluminum prices slid rapidly from RMB 15,120/mt and due to the negative impact from low-priced Rusal aluminum. In the afternoon, the wait-and-see sentiment dominated the market, with scarce offers. However, long positions of CHALCO remained confident in future prices, which exerted some support from aluminum prices.

    Lead:

    In Shanghai lead market, SMM lowered lead prices by RMB 150/mt to RMB 13,800-14,000/mt, signaling LME lead price corrections exerted significant negative impact on domestic lead prices. Brand smelters remained prices at RMB 13,800/mt. However, consumers stood in a stronger position in the market, and they could made deals at RMB 13,500-13,750/mt.

    Zinc:

    SHFE zinc prices opened low and went lower below RMB 15,000/mt. In spot zinc market, SMM offers RMB 14,650-14,750/mt for zinc prices. In the morning, deals were made around RMB 14,600/mt, as a small number of consumers purchased with the approach of weekend today after they took wait-and-see attitude with regard to continuous surges in zinc prices during the first half of this week. Spot discounts narrowed. In the afternoon, almost no deals were made due to plunged SHFE zinc prices. Market players lost confidence in RMB 14,500/mt, so zinc prices are expected to be RMB 14,300/mt early next week.

    Tin:

    Tin prices remained high in Shanghai market despite weak consumption, due mainly to tight supply from smelters.

    Nickel:

    In Shanghai nickel market, cargo-holders reduced prices to move goods. However, downstream purchasing interest was low during price corrections. Offers were RMB 146,000/mt for domestic nickel, and domestic nickel prices have been RMB 7000/mt lower than nickel ex-works prices at Jinchuan Group, and price spread between imported ad domestic nickel has expanded to RMB 4,000/mt, but it was still hard to sell imported nickel at RMB 142,000/mt.

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