SMM Daily Review (Aug. 10)

SHANGHAI, Aug. 11 (SMM) --

    Copper:

    SHFE copper prices opened high and went higher propelled by LME base metal prices in the afternoon, with a growth rate of more than 3.5%. Today, SHFE copper prices stabilized above RMB 48,000/mt, and three-month contract positions increased again, while spot-month contract prices fluctuated widely due to the approach of delivery date and were near RMB 49,000/mt at closing. SHFE copper prices are expected to move above RMB 49,000/mt tomorrow.

    In spot copper market, discounts narrowed to RMB 50-150/mt as the delivery date is drawing near, so spot copper was traded in the RMB 48,200-48,450/mt. In the morning, cargo-holders were active in moving goods, but the consumers were cautious about purchases. In the afternoon, the rising SHFE copper prices improved consumers’ buying interest. However, suppliers became reluctant to sell, especially for premium copper. Although there is little possibility copper prices will soar, copper prices are expected to move up to RMB 50,000/mt during this week. The downstream consumers are increasing their purchases after previous price hike.

    Aluminum:

    SHFE aluminum prices stabilized at RMB 15,000/mt, and then moved up to RMB 15,300/mt. Almost no price spread existed in different contracts today. SHFE aluminum prices advanced to RMB 15,250/mt in the morning and to RMB 15,300/mt in the afternoon. In spot aluminum market, offers remained unchanged at RMB 15,300/mt for CHALCO aluminum, with sharp declines in spot supply. Traded prices fluctuated in the RMB 15,210-15,220/mt range narrowly for other domestic aluminum, while traded prices for imported aluminum were RMB 15,180-15,200/mt. The price spread between imported and domestic aluminum was only RMB 10-20/mt, leading to weak transactions of imported aluminum. Spot aluminum prices received strong support below traded prices given the entrance of limited speculative funds, but the low-priced aluminum was unavailable. Spot discounts will narrow gradually as this month will change into another new contract month, and aluminum prices are expected to move up steadily.

    Lead:

    In Shanghai lead market, SMM lead prices remained unchanged in the RMB 13,800-14,000/mt range. Lead prices moved at RMB 13,700-13,800/mt in the morning. Smelters were firm with their offers at RMB 13,800/mt, but the downstream consumers wanted much lower prices, and they hoped to purchase at RMB 13,500/mt in an effort to reduce purchase costs. However, LME lead prices performed strong, and the entire positive metal environment will help drive up lead prices, but with a slower pace.

    Zinc:

    SHFE zinc prices opened high and moved up to RMB 15,000/mt. However, SHFE zinc spot month contract prices showed weak performance, and fell to RMB 14,850/mt in the afternoon, reflecting the actual spot market condition. In spot zinc market, SMM raised offers by RMB 150/mt to RMB 14,800-14,900/mt for #0 zinc, but actual traded prices were RMB 124,800/mt, with weak transactions. As limited deals were made in the RMB 14,500-14,600/mt range last Friday, and transactions were weak today, so spot discounts narrowed, and zinc prices fluctuated upward to RMB 15,000/mt, with support from strong LME and SHFE zinc prices. Zinc prices are expected to move upward.

    Tin:

    In Shanghai tin market, tin prices moved up to RMB 117,000-118,500/mt on Monday. Most brands tin prices were in the RMB 117,000-118,000/mt, except that a small number of inferior brands tin were traded at RMB 116,000-116,500/mt. However, consumers failed to adapt and accept higher tin prices after one-weak rise, so any upward room for tin prices will be limited.

    Nickel:

    In Shanghai nickel market, offers became cautious in Shanghai market due to adjustments in LME nickel prices last Friday, and some traders with goods from Jinchuan Group were willing to move cargos in an attempt to collect cash, but the purchasing sentiment remained low. In the context, offers for goods from Jinchuan group fell to RMB 146,000/mt from RMB 148,000/mt. However, LME nickel prices gained in the afternoon, and suppliers became reluctant to sell goods in the hope that they can raise nickel prices to RMB 150,000/mt tomorrow. Offers for imported nickel were RMB 142,000/mt and RMB 144,000/mt in the afternoon. Imported nickel transactions were more active than nickel from Jinchuan Group due to lower prices.

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