SMM Daily Review (Oct. 15)

SHANGHAI, Oct. 16 (SMM) --

    Copper:

    SHFE copper prices opened at RMB 49,000/mt, and went up to the range of RMB 49,500-49,680/mt, but then dropped straightly at noon along with falling A-share stock market. SHFE three-month contract copper prices stabilized at RMB 48,700/mt, and positions increased at a slower pace today. SHFE spot-month contract copper prices closed at RMB 48,650/mt. Today is the last trading day for 910 contracts.

    In spot market, copper prices fell from RMB 49,100-49,250/mt in the morning to the range of RMB 48,700-48,900/mt in the afternoon. Copper supply was ample in the market, while consumers lacked purchasing interest when copper prices were above RMB 49,000/mt. In this context, importers moved goods with discounts of RMB 100-200/mt reluctantly on the last trading day, and even “Yuntong” and “Jinchuan” high-purity copper was traded at a discount of RMB 50-100/mt as well. Today, “Jiangtong” copper was traded limitedly restricted by large spot discounts. Market rumors report SHFE copper inventories will increase nearly 10,000mt during this week, coupled with soaring copper imports released by customs, copper supply will remain sufficient in the short term, and spot discounts will also remain unchanged. Ample copper supply is also an important reason behind weak SHFE copper price and strong LME copper prices.

    Aluminum:

    SHFE aluminum prices soared in the morning, and SHFE three-month contract aluminum prices hit RMB 15,000/mt, but then slipped along with falling copper market and A-share stock market. SHFE three-month contract aluminum prices stabilized at RMB 14,900/mt, and SHFE spot-month contract aluminum prices were firm at RMB 14,900/mt, with limited fluctuations.

    In spot market, CHALCO moved goods again at RMB 14,930/mt in the morning, limiting the upper prices for spot aluminum today, and traded prices for other low-end aluminum dropped gradually to RMB 14,880/mt, with a discount of RMB 10/mt. In this context, sufficient market supply increased difficulties in transactions, and this situation will remain unchanged in the short term.

    Lead:

    In Shanghai lead market, SMM lead prices remained unchanged, and the market sentiment was also lukewarm. However, the higher LME lead prices helped domestic smelters keep their offers firm at RMB 15,600/mt. Today, the lower traded prices grew slightly to RMB 15,650/mt.

    Zinc:

    SHFE zinc prices opened high and went lower. SHFE three-month contract zinc prices climbed to RMB 16,210/mt, and closed at RMB 15,910/mt; SHFE spot-month contract zinc prices dipped to RMB 15,420/mt, and closed at RMB 15,580/mt, with price spread between two kind of contracts reaching RMB 400-500/mt.

    SMM lead prices increased slightly to the range of RMB 15,550-15,650/mt, leaving profit margins to arbitrageurs. In this context, traders and arbitrageurs were major market players in today's spot zinc market, while actual purchases by downstream manufacturers only accounted for 10-20% of total trading volumes. Positions of 1001 contracts declined by more than 10,000 lots. Spot discounts have expanded to RMB 400/mt as well.

    Tin:

    Transactions were moderate in Shanghai tin market, with “YT” as main brand in the market. Although offers for “YT” tin at RMB 118,000/mt have been accepted by a number of loyal customers, traders wanted lower prices and made deals at RMB 117,000/mt, which resulted in much higher trading volume of low-end tin than “YT” tin.

    Nickel:

    In Shanghai nickel market, Jinchuan Group kept offers firm at RMB 134,000/mt, while offers for imported nickel were in the RMB 132,500-133,000/mt range. Nickel prices still received relatively strong support from below RMB 130,000/mt despite of shortages of upward momentum. However, limited speculative activities from traders resulted in lukewarm trading sentiment.

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