SMM Daily Review (Sept. 21)

SHANGHAI, Sept. 22 (SMM) --

    Copper:

    SHFE copper prices opened low and moved lower negatively affected by dropping LME copper prices and plunged A-share stock market in the morning. SHFE copper prices fluctuated below RMB 49,000/mt, but climbed mildly at noon tracking LME copper price trends, and finally closed down 0.7%.

    In spot market, discounts remained in the RMB 50-100/mt range, and traded prices moved in the RMB 48,400-48,600/mt range in the morning. Market supply of imported and domestic copper was ample, and more deals were done when copper prices were RMB 48,400-48,500/mt, while consumers were cautious when copper prices were more than RMB 48,650/mt. Even when SHFE copper prices inched up in the afternoon, discounts for high-quality copper remained about RMB 100/mt, and transactions became slimmer. The declines in copper prices and wider discounts in spot market further generated consumers' concern over demand.

    Aluminum:

    SHFE aluminum prices outperformed LME aluminum prices. SHFE aluminum prices climbed straightly from the morning, with spot-month contracts rising to RMB 15,050/mt from RMB 14,930/mt. The situation of strong nearby-contracts and weak forward contracts remained in futures market.

    Spot aluminum market remained firm today, helping boost SHFE aluminum prices. CHALCO traders still held stocks, and imported aluminum remained unavailable in the market for one week, so offers for other low-grade aluminum were firm above RMB 15,000/mt, with premiums moving up to RMB 100/mt from RMB 50/mt, and traded prices also rose from RMB 15,000/mt to RMB 15,050/mt in the morning, and even climbed to RMB 15,080/mt in the afternoon. Market players said aluminum prices at RMB 15,000/mt are acceptable, but whether aluminum prices can soar to RMB 15,100-15,200/mt will depend on aluminum market conditions.

    Lead:

    In Shanghai lead market, SMM reduced lead prices constantly to the range of RMB 15,600-15,800/mt on Monday, and most cargo-holders offered RMB 15,500/mt. However, transactions remained weak, as a portion of low-priced aluminum (RMB 15,300/mt) exerted negative impact on aluminum market. LME lead prices were mixed, and different views between traders and smelters appeared. Smelters were firm with their offers at RMB 16,000/mt, while traders were willing to move goods rapidly and some traders with low costs hoped to purchase large volume of goods when prices were lower in order to reduce inventory costs. Lead prices are expected to continue to fluctuate during this week.

    Zinc:

    SHFE zinc prices opened low, and then climbed rapidly in the afternoon driven up by higher purchasing interest when zinc prices were low. However, total trading volumes dropped, indicating the struggles between long and short positions still existed. In the mean time, market players remained cautious, resulting in fluctuating market sentiment.

    In spot market, zinc prices were softer. Although inquiries were up when zinc prices were blow RMB 15,000/mt, trading volumes were limited. Spot discounts expanded to more than RMB 300/mt when SHFE zinc prices moved up to RMB 15,500/mt. Spot zinc prices received resistance at RMB 15,200/mt, and the price remained a major factor for downstream consumers to purchase goods.

    Tin:

    Shanghai tin market remained lukewarm, with limited deals done at RMB 117,500-118,000/mt, and high-grade tin smelters were firm at RMB 119,000/mt, but still delivered a preferential price at RMB 118,000/mt to a small number of long-term end-users, given the negative impact from low prices quoted by traders.

    Nickel:

    In Shanghai nickel market, offers remained firm at ex-works prices for Jinchuan nickel, with limited downward room, and imported nickel prices tried to stabilize at RMB 130,000/mt. More than more market players were pessimistic towards market outlook due to weak demand and low market sentiment.

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