SMM Daily Review (Sept. 4)

SHANGHAI, Sept. 7 (SMM) --

    Copper:

    Central Government will remain financial policy stable, helping support Shanghai bulk commodity market, and Shanghai composite index grew by 0.82%. SHFE copper prices stabilized at RMB 49,000/mt, and then fell slightly due to concerns on the upcoming data tonight, as well as decreasing open interest by the weekend. In spot market, market transactions remained weak. In the morning, cargo-holders with Guixi brand copper reduced prices with discounts of RMB 50/mt reluctantly, due to weak transactions, and as spot discounts for a number of imported copper and other domestic copper reached RMB 100/mt. SHFE copper prices fell again after 11:00 to RMB 49,300-49,500/mt, but spot discounts for high-quality copper remained 0 or even positive RMB 20/mt. Today, hydro-copper transactions were very limited weighed by parity copper. In general, downstream consumers were cautious about purchases.

    Aluminum:

    SHFE aluminum prices soared to RMB 15,000/mt, but all contracts received resistance from RMB 15,150/mt. In spot market, spot discounts widened slightly due to rising SHFE aluminum prices, and market supply of CHALCO brand aluminum was limited. Spot prices were RMB 15,100/mt for CHALCO brand aluminum. Offers were RMB 15,030/mt for inferior brands aluminum, but then fell slipped negatively affected by the lower prices of RMB 15,000/mt for imported aluminum from Russia. Aluminum prices find great downward pressure on the uptrend to RMB 15,000/mt in view of weak consumption and low purchasing interest.

    Lead:

    In Shanghai lead market, SMM lead prices grew by RMB 500/mt to the range of RMB 15,500-15,700/mt. Smelters were reluctant to sell goods, and traders faced difficulties in the availability of lead at RMB 15,700/mt, with very limited market supply. Downstream consumers increased purchases around RMB 15,800/mt gradually and reluctantly. Market prices will move up to RMB 16,000/mt and above rapidly next week, if LME lead prices remain high with a sign of rise.

    Zinc:

    SHFE zinc prices continued to grow significantly, and increased to daily limit in the morning, and most contracts remained at daily limit except 910 contracts. Open interest increased, and three-month contracts closed at RMB 15,800/mt, and spot-month contracts closed at RMB 15,500/mt. In spot zinc market, SMM #0 zinc prices rose by RMB 550/mt to RMB 15,200-15,300/mt. In the morning, downstream purchasing interest remained low, while traders were active in speculative activity given as wide as RMB 500/mt price spread between SHFE zinc and spot zinc. Market supply became limited in the afternoon, and LME zinc prices set a record high for 2009, helping generate the reluctance of cargo-holders. However, the situation of strong SHFE zinc prices and weak spot zinc prices will remain unchanged.

    Tin:

    In Shanghai tin market, tin prices still moved in the RMB 117,000-118,000/mt range regardless of rebounding LME tin prices. If LME tin prices continued to rebound, domestic tin prices will likely to move up, , but tin prices seem to lack upward momentum to reaching RMB 120,000/mt.

    Nickel:

    In Shanghai nickel market, Jinchuan Group reduced nickel ex-works prices by RMB 4,000/mt to RMB 141,000/mt unexpectedly. LME nickel prices rebounded slightly, stimulating tin prices to grow in Shanghai market. Offers were RMB 140,000/mt for Jinchuan brand nickel, almost flat at ex-works prices, while offers were RMB 136,500/mt for imported nickel. Traders held a cautious and optimistic attitude with regard to nickel prices next week.

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