SMM Daily Review (Sept. 2)

SHANGHAI, Sept. 3 (SMM) --

    Copper:

    SHFE copper prices were stable in the morning, but fell rapidly after 11:00. SHFE copper three-month contract prices fell to RMB 46,930/mt and then moved in the RMB 47,200-47,300/mt range in the afternoon, with a 3.92% decline, while spot-month contracts fluctuated in the RMB 47,500-47,700/mt range after fell to RMB 47,300/mt. Short positions continued to weigh on long positions, leaving pessimistic sentiment in the market. In this context, traders had no interest in purchases when copper prices plummet in the morning.

    In spot market, copper prices fell from the range of RMB 48,000-48,200/mt to the range of RMB 47,500-47,800/mt rapidly in the morning, with daily traded price range of more than RMB 500/mt. In the afternoon, a number of traders raised spot premiums to RMB 100/mt given stabilized SHFE copper prices, and trading volume increased slightly as well. However, the pessimistic sentiment still prevailed among market players, so whether or not the stabilized financial market can generate sufficient market confidence and show a clear market direction will determine the copper price trend.

    Aluminum:

    SHFE aluminum prices opened slightly low in the morning, and then fell to RMB 14,700/mt after copper prices slipped rapidly after 11:00. Spot-month contracts prices stabilized at RMB 14,800/mt in the morning, and recovered slightly in the afternoon, and closed at RMB 14,890/mt. In spot market, almost no price spread existed between domestic and imported aluminum, but traders with imported aluminum from Australia reduced prices to RMB 14,860/mt first, and then prices for some inferior brands aluminum also dropped to RMB 14,870-14,880/mt. In the context, traded prices continued to move down to RMB 14,850/mt along with falling SHFE aluminum prices, and consumers still purchased based on production needs. Almost no traders purchased goods at lower prices upon concerns of the support level of RMB 14,800/mt. At present, CHALCO brand aluminum supply was limited, exerting limited impact on aluminum ingot market, but pessimistic sentiment is spreading in the market.

    Lead:

    In Shanghai lead market, SMM lead prices were unchanged. Struggles intensified in the market at RMB 15,000/mt. However, downstream consumers refused to accept lead prices above RMB 15,000/mt due to negative impact from plunged other base metal prices. Except for some large lead smelters, other smelters were cautious about the sustainability of lead price rise. Offers were mixed in Henan province, and actual transactions were limited.

    Zinc:

    SHFE zinc prices dropped along with SHFE copper price trend, and the situation of strong forward contracts and weak soon-to-expire contracts continued in the market. However, SHFE zinc prices received limited support from RMB 14,500/mt, resulting in limited downward room. In spot market, purchasing volumes were up in the morning when zinc prices were in the RMB 14,500-14,600/mt range, with narrowed spot discounts. Although zinc prices reported limited downward room, zinc prices will face difficulty in rebounding, so zinc prices will continue to fluctuate narrowly.

    Tin:

    In Shanghai tin market, inferior brands tin prices fell to RMB 117,000/mt, and traded prices for other brands tin dropped as well. Plunged commodity markets greatly depressed tin market sentiment, weighing on tin prices.

    Nickel:

    In Shanghai nickel market, prices were RMB 135,000-136,000/mt for imported nickel and RMB 140,000/mt for nickel from Jinchuan Group. The pessimistic sentiment was prevailing among nickel market players given weak LME nickel prices and falling prices for other base metals, resulting in weak transactions.

Copyright © 2009, CBI (Shanghai) Co., Ltd. All Rights Reserved.

None of this material may be used for any commercial or public use in any form or means, without the prior written consent of CBI China. For reproduction issue, please contact us by email: metalresearch@cbichina.com or tel:86-21-51550040