SMM Daily Review (Sept. 14)

SHANGHAI, Sept. 15 (SMM) --

    Copper:

    SHFE copper prices opened low and hovered at low levels, as SHFE rubber prices dropped to daily limit. SHFE copper prices have ever fallen to daily limit in the morning, with a decline of 4.5%. Although the US dollar remained low, the sluggish copper market fundamentals hampered any upward movement for copper prices, resulting in lukewarm market sentiment. Low-priced purchases increased in the afternoon, leading to increasing positions, and copper prices corrected again. Struggles between long and short positions appeared in the market with regard to future market. Some believe the weaker US dollar will help copper prices move up, but they were still wary in purchasing, while others believe copper prices faced greater downward pressure and will likely move down again before delivery date in order to attract more medium-term low-priced purchases and support.

    In spot market, spot discounts ranged from RMB 0/mt to positive RMB 100/mt due to significant declines in copper prices, and from the approach of delivery date, with traded prices in the RMB 47,700-47,850/mt range. The transactions became brisk from noon to afternoon, indicating the copper prices of RMB 47,700-47,800/mt have been accepted by most consumers.

    Aluminum:

    SHFE aluminum prices opened low and moved at low levels negatively affected by falling SHFE rubber and copper prices, but three-month contract aluminum prices moved above daily average line, with tiny price spread between different contracts. Three-month contract aluminum prices kept fluctuating around RMB 14,700/mt. In spot market, arbitrageurs obtained profit of more than RMB 200/mt, and spot premiums remained at RMB 10-50/mt, generating the sentiment of cargo-holders in moving goods. Traded prices have risen to RMB 14,830-14,870/mt from RMB 14,820-14,850/mt, and average traded price advanced as well. “CHALCO” and other famous brands aluminum traders had low interest in moving cargos below RMB 15,000/mt before the delivery date.

    Lead:

    LME lead prices have fallen by more than USD 400/mt, while lead prices in Shanghai market dropped at a slower pace, and struggles between long and short positions remained intense. Although smelters were still firm that any downward room for lead prices will be limited, most smelters have lowered their price offers, and only “Yuguang” and other famous brands lead traders were firm with their offers at RMB 15,700-15,800/mt. Traders with inventories in hand sold off goods in a panic. SMM lead prices were RMB 15,700-15,900/mt, with lowest offer at RMB 15,200/mt. Lead prices will fall at a much slower pace if LME lead prices end the downward trend.

    Zinc:

    SHFE zinc prices increased to daily limit, and later moved above daily average line, with three-month contract prices hovering in the RMB 14,500-14,800/mt range and spot-month contract prices moving in the RMB 14,500-14,550/mt range. Total positions continued to decrease. In spot market, spot discounts were about RMB 100/mt, and spot prices were RMB 14,600/mt, backing to the fluctuating range in early September and attracting more buyers to purchase. Struggles with regard to future zinc prices appeared in the market. Smelters still believe any downward room for zinc prices will be limited, and a number of market players believe zinc prices will likely rebound after a plummet on Monday. However, others believe zinc prices will continue to move down in the short term.

    Tin:

    In Shanghai tin market, traded prices moved in the RMB 117,500-118,000/mt range, and inferior brands tin acquired more market shares based on low prices, but most consumers stood on sidelines.

    Nickel:

    In Shanghai nickel market, nickel prices slipped sharply due to plunging LME nickel prices, and imported nickel prices have fallen below RMB 130,000/mt, further narrowing the import loss. Today, prices for nickel from Jinchuan Group stabilized around RMB 133,000/mt reluctantly, but almost no deals were made. The panic sell-off activities appeared among traders. Special attention should be paid to whether or not Jinchuan Group will reduce nickel ex-works prices tomorrow.

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