SMM Daily Review (Sept. 23)

SHANGHAI, Sept. 24 (SMM) --

    Copper:

    SHFE copper prices opened high and went lower. SHFE copper prices have shown weak performance below daily average line in the morning, and later slumped along with plunged A-share stock market in the afternoon, and closed at a day-low point finally. Total positions experienced increases for the first time in nearly one week given higher purchasing interest when copper prices were low.

    In spot market, discounts narrowed. Discounts for parity copper were about RMB 80/mt, and only offers for “Jiangtong” copper were firm at the same price as SHFE copper prices. Discounts for premium copper were about RMB 50/mt. Today, price spread between parity and premium copper was RMB 50/mt, and transactions of parity copper were weak, with traded prices in the RMB 48,650-48,800/mt range. Market supply was mainly imported copper, with greater supply pressure. Cargo-holders preferred to move cargos before National Day holiday in order to minimize market risks, while downstream buying interest became higher due mainly to lower copper prices. Spot premiums of RMB 50/mt appeared in the market in the afternoon when SHFE copper prices plunged, with traded prices down to the range of RMB 48,400-48,600/mt, and daily price spread has reached to nearly RMB 500/mt.

    Aluminum:

    SHFE aluminum prices opened high, and then climbed suddenly to RMB 15,050/mt after 10:30 with support of firm spot aluminum prices. Later, the sell-off activities of short positions at higher prices weighed on aluminum prices, and SHFE aluminum prices even moved down straightly in the afternoon due to plunged A-share stock market, with spot-month contracts down to RMB 14,950/mt and three-month contracts down to RMB 14,860/mt, and both trading volume and positions declined further.

    In spot market, CHALCO still held back stocks, and sport premiums were RMB 50/mt, with limited offers at a premium of RMB 70-80/mt, and offers were driven up to RMB 15,080/mt from RMB 15,050/mt, and limited cargo-holders even offered at RMB 15,100/mt, resulting in brisk trading activity. However, the high premiums will unlikely continue until next week with the approach of National Day holiday.

    Lead:

    In Shanghai lead market, LME lead prices soared by USD 100/mt, and SMM lead prices only increased by RMB 100/mt to the range of RMB 15,700-15,900/mt, signaling bearish domestic market. Transactions became worse then lead prices approached to RMB 16,000/mt. Traded prices remained in the RMB 15,600-15,700/mt range, and struggles between long and short positions remained intense.

    Zinc:

    SHFE zinc prices opened high, but kept moving below daily average line due to a lack of upward momentum. SHFE zinc prices dropped significantly in the afternoon due to plunged A-share stock prices, but total positions experienced increases for the first time given higher purchasing interest when zinc prices were low.

    In spot market, #0 zinc prices were RMB 15,000/mt in the morning, but no deals were done. The trading sentiment was very different upon a price spread of only RMB 100/mt, indicating consumers paid more attention to costs.

    Tin:

    In Shanghai tin market, tin prices remained in the RMB 117,500-118,000/mt range, and smelters had no plans to reduce prices, while downstream consumers had no purchasing interest, resulting in neutral market. 

    Nickel:

    In Shanghai nickel market, market supply of Jinchuan nickel increased when nickel prices were RMB 132,000/mt, and the recovery of LME nickel prices will likely trigger the purchasing interest of traders, so trading volumes increased significantly today, weighing on the transactions of imported nickel. In this context, the priority of imported nickel prices is to remain at RMB 130,000/mt.

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