SMM Daily Review (Sept. 28)

SHANGHAI, Sept. 29 (SMM) --

    Copper:

    SHFE copper prices moved smoothly before 11:00, but later slipped along with falling A-share stock market. The Shanghai Composite index closed down 2.65% today, while SHFE copper prices also closed down 2.5%, and total positions declined by more than 15,000 lots. SHFE 912 contracts kept moving backward, and SHFE three-month contract copper prices have fallen below RMB 46,000/mt, hitting the low level of RMB 45,500/mt. The pessimistic sentiment prevailed among market players, and investors withdrew funds from the market in order to minimize market risks.

    In spot market, the trading sentiment was brisk. Traded prices dropped from RMB 47,300/mt in the morning to RMB 46,850/mt at noon, with the price spread reaching RMB 500/mt. Traders were eager to move goods to recollect cash during the last three trading days before China's National Day holiday, so spot premiums felt hard to improve. On the contrary, cargo-holders stood in negative position in the market due to ample supply. However, a number of consumers believe current prices are acceptable, and especially when copper prices dipped to the range of RMB 46,300-46,400/mt, a portion of market players believe any downward movement for copper prices will be limited supported by consumption in the short term.

    Aluminum:

    SHFE aluminum prices opened low, and went lower to RMB 14,500/mt along with falling A-share prices and LME copper prices. In spot market, premiums have fallen from last week level of RMB 100-120/mt to RMB 70-100/mt, an indication of a sign of sell-off activities. Cargo-holders were firm with premiums of RMB 100/mt in the morning, but buyers remained quiet. In the afternoon, SHFE aluminum prices slumped, exerting negative impact on spot market, and traded prices fell from RMB 14,850/mt in the morning to RMB 14,700/mt in the afternoon. Cargo-holders adopted a wait-and-see attitude with regard to prices at RMB 14,500/mt, with pessimistic sentiment prevailing among market players. Consumers predict aluminum prices will dip further tomorrow, and the stock replenishment activities are coming to an end, so spot premiums are expected to drop further during the coming two days.

    Lead:

    In Shanghai lead market, SMM lead prices remained at RMB 15,400-15,450/mt, and market prices also moved around RMB 15,400/mt. Downstream consumers continued to stand on the sidelines in order to minimize market risks. Smelters were firm with offers above RMB 15,300/mt given stabilized LME lead prices. Market players were cautious about transactions during the last three trading days, and domestic lead market is expected to remain stable.

    Zinc:

    SHFE zinc prices opened low and went lower, and fell below RMB 14,800/mt at noon along with falling A-share prices and copper prices, and total positions continued to decline. In spot market, zinc prices continued to fall at a slower pace. Cargo-holder narrowed discounts due to plunged SHFE zinc prices, and zinc prices stabilized at RMB 14,700/mt in the morning, and transactions were moderate, while the purchasing interest became lower in the afternoon, but suppliers remained firm. Suppliers will offer RMB 14,500/mt in spot market tomorrow, if SHFE zinc prices continue to fall.

    Tin:

    In Shanghai tin market, offers for high-quality tin remained stable, while downstream consumers stood on the sidelines and purchased on an as-needed basis. Traders mainly moved low-priced low-quality tin in the RMB 116,500-117,500/mt range, and mainstream traded price range dropped slightly.

    Nickel:

    In Shanghai nickel market, Jinchuan Group cut nickel ex-works prices again by RMB 3,000/mt to RMB 128,000/mt today, depressing market sentiment, and panic sell-off activities at RMB 127,000/mt appeared in the market, and imported nickel had no advantages in the market given its prices same as prices for Jinchuan nickel, so both traded prices and trading volumes for imported nickel shrank.  

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