SMM Daily Review (Sept. 1)

SHANGHAI, Sept. 2 (SMM) --

    Copper:

    SHFE copper prices dipped further, with all contracts down RMB 250-300/mt. SHFE copper spot-month contract prices slipped to RMB 49,200/mt, and closed at RMB 49,600/mt reluctantly despite of slightly recovery in the afternoon. In spot market, transactions were weak in the morning, and short positions outperformed long positions, generating the panic sentiment of downstream consumers. In this context, spot discounts remained at RMB 50-150/mt, with traded prices in the RMB 49,200-49,300/mt range. Spot discounts were RMB 100/mt for imported and domestic high-quality copper, with traded prices in the RMB 49,200-49,300/mt range. In the afternoon, traded prices improved to the range of RMB 49,300-49,500/mt, since the stabilized SHFE copper prices have stimulated the purchasing interest of traders.

    Aluminum:

    SHFE aluminum prices bottomed out and continued to fluctuate narrowly, with great downward pressure from the important level of RMB 15,000/mt. Today, CHALCO raised spot alumina prices by 6.25% to RMB 2,550/mt from RMB 2,400/mt, creating upward momentum for aluminum costs. In spot market, aluminum prices were RMB 14,950-14,980/mt, with discounts remaining at RMB 20-40/mt. Traders with domestic aluminum were active in moving cargos, but panic sentiment triggered by plunged A-share stock markets still existed in the market, depressing the purchasing interest of traders and downstream consumers. Almost no price spread between imported and domestic aluminum, resulting in poor sales.

    Lead:

    In Shanghai lead market, SMM lead prices were unchanged. Struggles appeared in the market at RMB 15,000/mt. A number of smelters were firm with their target offers at RMB 15,500/mt. However, the plunged security market, futures market and commodity market dampened optimistic market sentiment seriously, so most of medium and small smelters became diffident in raising lead prices, and downstream consumers even adopted a wait-and-see attitude. In this context, traders were willing to move cargos given low buying interest in the market, with mixed offers.

    Zinc:

    SHFE zinc prices fell back to RMB 14,950/mt after soared in the morning, with three-month contracts closing at RMB 15,000/mt, while SHFE spot-month contract prices showed a weak performance. In spot market, traded prices moved around RMB 14,700/mt in the morning. Spot discounts to three-month contracts narrowed to RMB 200/mt, but the wait-and-see attitude dominated the market, leaving slim trading activity. In the afternoon, SHFE zinc prices recovered, increasing market inquiries and improving trading sentiment.

    Tin:

    Shanghai tin market remained sluggish for several days, and traded prices of RMB 118,000-118,500/mt have inched down gradually, as falling prices for other metals dampened the optimistic sentiment of smelters, and smelters had to lower prices in attempt to sell goods.

    Nickel:

    In Shanghai nickel market, Jinchuan Group reduced nickel ex-works prices to RMB 145,000/mt for second tine since late August, down RMB 4,000/mt, but market prices remained at RMB 143,000/mt, and imported nickel prices fell to RMB 140,000/mt as well. Tonight, LME nickel prices slipped again, and imported nickel prices will likely fall below RMB 140,000/mt, and transactions will become worse.

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