SMM Daily Review (Aug. 24)

SHANGHAI, Aug. 25 (SMM) --

    Copper:

    The positive existing home sales in the US drove up LME base metal prices, and LME copper prices closed at USD 6,305/mt, up 5%. Today, SHFE copper spot-month contract prices opened high and then increased to daily limit of RMB 49,630/mt. However, downstream producers showed reluctance towards soaring copper prices, dragging down copper prices to RMB 49,450/mt. Spot discounts ranged from RMB 100/mt to 0. LME copper prices continued to move up in electronic trading, so SHFE copper prices climbed to daily limit again after 11:00, and traders moved cargos limitedly, leaving limited market trading volumes.

    According to General Administration of Customs, China's imports of refined copper were 292,226mt, up 231.79% YoY, but down 23% compared to June levels of 378,943. As SHFE/LME copper price ratio remained low since June, and scrap copper imports increased, leaving to slight supply surplus in domestic spot market, so refined copper imports will continue to decrease on a monthly basis, and the situation of strong LME copper prices and weak SHFE copper prices will continue in the short term.

    Aluminum:

    Today, aluminum spot market remained weak. SHFE aluminum prices opened high in the morning, up less than 3%, with a much slower pace than other base metals, while spot aluminum prices climbed to RMB 15,000/mt, generating the wait-and-see sentiment of downstream consumers, and the slight declines in SHFE aluminum prices also dampened market sentiment. In spot market, traded prices for domestic aluminum moved in the RMB 15,060-15,070/mt range in the morning, RMB 15,040/mt for imported aluminum ingot. Traded prices moved upward to the range of RMB 15,070-15,100/mt in the afternoon, as SHFE aluminum three-month contract prices picked up to RMB 14,200/mt. Arrivals were limited in Shanghai during weekend, and market consumption was weak, with lackluster market sentiment. 

    Lead:

    In Shanghai lead market, SMM lead prices increased by RMB 100/mt to RMB 13,600-13,700/mt, and more than one month discounts disappeared from the market, but overall trading volumes remained limited. Suppliers were reluctant to sell in anticipation of domestic lead prices rise in the future following LME lead prices, as well declines in future spot market supply. Downstream buyers held mixed sentiment and were concern about sell-off activities at RMB 14,000/mt or above in view of current high market inventories.

    Zinc:

    SHFE zinc prices climbed, with spot-month contract zinc prices stabilizing at RMB 15,180/mt and three-month contract zinc prices soaring to RMB 15,630/mt. In spot market, spot prices moved upward to RMB 15,000/mt and above, with traded prices hovering in the RMB 14,950-15,050/mt. Although spot traded prices faced downward pressure above RMB 15,000/mt, transactions were better than expected. However, most of buyers with raw materials inventories in hand held wait-and-see attitude.

    Tin:

    LME tin prices closed at USD 14,200/mt in electronic trading last Friday, up USD 450/mt. Today, LME tin prices moved around USD 14,350/mt in electronic trading, and then jumped by USD 200/mt to RMB 14,400/mt in the afternoon following LME copper and nickel prices trends, with further upward momentum.

    In this context, inquiries from traders and downstream consumers increased due to limited inventories, while smelters continued to keep their offers firm. Main brands include Jinhai, Yunheng and YT in the market given the unavailability of inferior brand tin, with mainstream traded prices in the RMB 118,000-118,500/mt range. Only limited deals were made at RMB 119,500/mt.

    Nickel:

    In Shanghai nickel market, market transactions recovered due to rising LME nickel prices, but only limited downstream buyers entered the market. Jinchuan Group raised nickel prices to RMB 149,000/mt, but market traded prices moved in the RMB 147,000-148,000/mt range. Traded prices for imported nickel were in the RMB 144,000-145,000/mt range, with general transactions. Market insiders said the wait-and-see sentiment dominated current market, as LME nickel prices trend remained uncertain.

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