SMM Daily Review (Oct. 14)

SHANGHAI, Oct. 15 (SMM) --

    Copper:

    SHFE copper prices opened low, but climbed to RMB 49,000/mt at noon after China Customs released export and import data in September, with spot-month contracts and three-month contracts prices closing at RMB 49,200/mt. SHFE copper prices dropped by RMB 300/mt in the morning, but grew by RMB 200/mt in the afternoon. Positions of three-month contracts increased by more than 13,000 lots. Tomorrow is the last trading day for 910 contracts, and positions have declined to 6,130 lots.

    In spot market, cargo-holders were reluctant to make deals with large discounts given the approaching delivery date. Traded prices for premium copper were RMB 48,700-48,750/mt in the morning, and discounts for parity copper ranged from RMB 50/mt to RMB 100/mt. Copper prices picked up to RMB 49,000/mt after SHFE copper prices rebounded at noon, generating the wait-and-see sentiment of consumers. However, a number of speculators still existed in the market. China's copper imports increased unexpectedly during September, further indicating sufficient domestic copper supply, so weak consumption and sluggish demand are expected to hamper any upward movement for copper prices.

    Aluminum:

    SHFE aluminum prices were restricted to 30-day average line, and positions of spot-month contracts declined, since tomorrow is the last trading day before the delivery date. In the afternoon, SHFE three-month contract aluminum prices moved up following copper price trend, but still faced greater pressure from RMB 15,000/mt, and closed at RMB 14,970/mt.

    In spot market, CHALCO moved cargos again at RMB 14,880-14,900/mt, limiting any upward movement for traded prices, and other low-end aluminum was traded below RMB 14,880/mt reluctantly. Spot aluminum prices remained flat with SHFE aluminum prices in the afternoon, with upper traded prices at RMB 14,900/mt. Weak demand remained a major reason behind soft aluminum spot prices.

    Lead:

    In Shanghai lead market, SMM lead prices remained in the RMB 15,600-15,800/mt range. In spot market, smelters kept offers firm at RMB 15,600/mt, and almost no traders moved goods at lower prices since yesterday, so low-priced lead was unavailable in the market, resulting in neutral transactions.

    Zinc:

    SHFE zinc prices opened low and went higher. SHFE three-month contract zinc prices continued to move above average lines and then inched up to RMB 16,200/mt. Both RSI and KDJ indicators remained in upward track. However, SHFE zinc prices experienced wide fluctuations on high levels for 4 consecutive days, leaving more possibility that zinc prices will fall to the range of RMB 15,500-15,850/mt.

    In spot market, consumers remained cautious for four days after the holiday, and then raised purchases. Today, the trading sentiment was brisk when zinc prices were RMB 15,600/mt, but transactions met resistance again when zinc prices approached to RMB 16,000/mt in the afternoon. Spot zinc discounts expanded, limiting the upward room for spot zinc prices. Consumers will likely stand on the sidelines when zinc prices are in RMB 15,800-16,000/mt range.

    Tin:

    In Shanghai tin market, offers for high-end tin were firm at RMB 118,000/mt, but offers for low-end tin were RMB 117,000/mt, with lukewarm trading sentiment.

    Nickel:

    In Shanghai nickel market, imported nickel was traded below RMB 132,000/mt. Jinchuan nickel was quoted at RMB 132,500/mt in the morning, with traded prices up to RMB 133,000/mt gradually, but actual transactions remained weak. Cargo-holders kept offers firm and hoped nickel prices to rebound with the positive impact from rebounding LME nickel prices. However, weak demand has limited any upward movement for domestic nickel prices for several times.

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