SMM Daily Review (Sept. 8)

SHANGHAI, Sept. 9 (SMM) --

    Copper:

    SHFE copper prices fluctuated around daily average line widely in the morning, and rebounded rapidly in the afternoon driven up by a 1.7 growth in Shanghai composite index in A-share stock markets, as well as by increases in LME copper prices, and SHFE spot-month contracts copper prices closed up to RMB 50,000/mt. SHFE copper prices are expected to soar to RMB 50,000/mt tomorrow, if LME copper prices remain strong tonight. However, spot copper market has shown weak performance in the morning. Although cargo-holders were unwilling to expand discounts, spot discounts have reached RMB 100/mt, and discounts for premium copper were RMB 50/mt, with zero for Jiangtong brand copper. Price spread between premium and parity copper was limited, and market trading sentiment was weak. In the afternoon, a number of traders increased purchased upon optimistic price outlook due to rising SHFE copper prices, while downstream consumers were still cautious about the important level of RMB 50,000/mt. Transactions will be worse if copper prices grow to RMB 50,000/mt tomorrow.

    Aluminum:

    SHFE aluminum prices moved on the edge of RMB 15,000/mt in the morning, but soared to above RMB 15,000/mt in the afternoon, as LME aluminum prices hit USD 1,900/mt. SHFE aluminum spot-month contracts prices closed at RMB 15,135/mt, and nearby-month contracts closed at RMB 15,100/mt. In spot market, offers were RMB 15,000-15,050/mt, and traders with Tongchuan and Dongfang brands aluminum hoped to offer above RMB 15,000/mt, with narrow fluctuations around RMB 15,020/mt and slight discounts of RMB 10-20/mt. Offers were above RMB 15,050/mt for high-grade aluminum, but transactions were weak, and cargo-holders were unwilling to move goods below RMB 15,000/mt, leaving limited market supply. Offers for high-grade aluminum were RMB 15,100/mt in the afternoon, while offers for other aluminum moved up to RMB 15,050/mt as well, but almost no direct consumers were involved in transactions. If aluminum prices stabilize at RMB 15,100/mt tomorrow, smelters would like to sell goods, and market supply will likely become sufficient as a result.

    Lead:

    In Shanghai lead market, SMM lead prices increased by RMB 200/mt to RMB 16,000-16,200/mt in the morning. Transactions were weak, and struggles between suppliers and buyers continued. Smelters were optimistic about lead prices above RMB 16,500/mt, while downstream consumers were cautious, and increases in lead prices slowed after lead prices soared to RMB 16,000/mt. However, LME lead prices advanced by USD 100/mt again in the afternoon, regenerating market concerns on price outlook. Smelters became reluctant to move goods, but a number of inferior brands lead traders would have high interest in cargo movement when lead prices remain above RMB 16,000/mt. 

    Zinc:

    SHFE zinc prices opened flat and moved upward driven by further rise in LME zinc prices in the afternoon, but with weak upward momentum. In spot market, traded prices consolidated at RMB 15,000/mt in the morning, with deals mainly made around RMB 15,100/mt. Smelters, especially famous brand #0 zinc smelters were firm with their offers. In the afternoon, LME lead and zinc prices continued to rise, further improving the optimistic sentiment of this portion of smelters. However, similar to lead market performance, downstream consumers remained quiet.

    Tin:

    In Shanghai tin market, tin prices remained around RMB 118,000/mt, and a portion of traders were optimistic about tin prices up to RMB 120,000/mt.

    Nickel:

    In Shanghai nickel market, offers were RMB 139,000/mt for nickel from Jinchuan Group and RMB 136,000/mt for imported nickel in the morning. In the afternoon, LME nickel prices surged, generating a reluctance of cargo-holders. Prices for nickel from Jinchuan Group are expected to soar to RMB 141,000/mt tomorrow. Transactions are expected to become better if LME nickel prices continue to rebound.

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