SMM Daily Review (Aug. 13)

SHANGHAI, Aug. 14 (SMM) --

    Copper:

    SHFE copper prices opened high and went higher improved by LME copper price level of USD 6,300/mt, with daily growth rate of 4%. SHFE copper prices advanced to RMB 50,000/mt, and 0908 and 0909 contracts prices closed at RMB 50,000/mt, and spot-month contract prices even jumped to RMB 50,550/mt. In spot market, copper prices met great downward pressure at RMB 50,000/mt. Spot discounts have expanded to RMB 150-200/mt. Copper spot prices increased by nearly RMB 1,500/mt compared to yesterday, and imported copper has experienced a loss of more than RMB 1,000/mt given its costs greater than RMB 50,000/mt. In this context, importers preferred to adopt a wait-and-see attitude before delivery. In the mean time, traders with domestic copper were reluctant to move goods, leading to limited market supply, and downstream consumers also became cautious with regard to higher copper prices. Scrap copper began playing more important role than refined copper when copper prices soared.

    Aluminum:

    SHFE aluminum prices rebounded, but faced limited downward pressure at RMB 15,300/mt, and spot-month contract also performed worse at RMB 15,200/mt. In spot market, offers were RMB 15,170-15,190/mt, with quiet market sentiment. CHALCO was firm with RMB 15,300/mt in the short term, and Qingtongxia and other brands aluminum also kept offers firm with premiums of RMB 20-50/mt, or they will choose delivery to the warehouse. Traders were in a dilemma at current prices, and cargo-holders also dared not replenish stocks, and downstream consumers purchased based on production needs. Today, imported aluminum prices were RMB 15,140-15,150/mt, with discounts of RMB 20-40/mt, still without market advantages.

    Lead:

    Shanghai lead market remained quiet despite of strong performance of other base metal prices, reflecting the weak lead market fundamentals. SMM lead prices remained unchanged, and spot discounts still existed in the market. Market players expected the positive economic environment will improve lead consumption. Traded prices received limited support at RMB 13,500/mt, and transactions improved slightly compared to yesterday.

    Zinc:

    SHFE zinc prices opened high and went higher. Although SHFE zinc prices advanced to RMB 15,000/mt, the upward room was less than SHFE copper prices, indicating weak spot zinc market. SMM raised zinc prices by RMB 300/mt to RMB 14,950-15,050/mt. However, spot discounts expanded again in the market, and deals were mainly made around RMB 14,900/mt in the morning, only a portion of #0 brand zinc held out for RMB 15,000/mt. Traders were active in moving goods, but downstream consumers had low purchasing interest. Slight price increases failed to improve spot market in the afternoon.

    Tin:

    In Shanghai tin market, tin prices continued to advance. Yunxi brand tin held out for RMB 120,000/mt, with limited trading volumes. Inferior brand tin prices moved up to RMB 118,500-119,000/mt. Downstream consumers will likely accept higher tin prices passively given increasingly price rise for raw materials.

    Nickel:

    In Shanghai nickel market, the upward room for nickel prices was limited in the morning, and domestic Jinchuan nickel faced downward pressure at RMB 150,000/mt. Market prices showed an embarrassing performance at RMB 149,000-149,500/mt, much lower than nickel ex-works prices of RMB 153,000/mt. Imported nickel prices were RMB 145,000-146,000/mt in the market, with weak transactions. LME nickel prices showed strong performance again in the afternoon stimulated by LME copper prices, generating the reluctance of traders in cargo movement. Jinchuan nickel prices are expected to move up to RMB 153,000/mt tomorrow in the market.

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