SMM Daily Review (Nov. 3)

SHANGHAI, Nov. 4 (SMM) --

    Copper:

    SHFE copper prices opened high, and climbed rapidly in the morning. SHFE three-month contract copper prices slipped after hitting RMB 51,100/mt due to support shortages and great resistance, and then fluctuated below daily average line, while SHFE spot-month contract copper prices hovered around RMB 50,800/mt in the morning, with mild fluctuations. Positions increased significantly in the morning, but dropped slightly in the afternoon, and copper prices dipped to test the support level of RMB 50,500/mt.

    In spot market, downstream consumers reduced purchases today after large amount of purchase volumes yesterday, so spot discounts expanded slightly. Spot discounts for premium copper were RMB 120-180/mt, while spot discounts for parity copper were RMB 200-250/mt. Traded prices were RMB 50,550-50,650/mt in the morning, but fell to the range of RMB 50,400-50,500/mt in the afternoon. Recently, the price spread between parity copper and premium copper was only RMB 50/mt, helping raise the price advantage for premium copper. Downstream purchasing interest will be higher when copper prices fall to RMB 50,000/mt, and will be lower when copper prices are in the RMB 50,500-51,000/mt range, an indication that market players were more sensitive to copper prices.

    Aluminum:

    SHFE aluminum prices opened high, but SHFE three-month contract aluminum prices still faced great pressure at RMB 15,300/mt, and slipped below daily moving line, and closed low finally. SHFE spot-month contract aluminum prices also failed to stand firm at RMB 15,000/mt, and fell to RMB 14,980/mt.

    In spot market, spot discounts expanded to RMB 50-100/mt. Imported aluminum holders did not reduce prices given no cargo movement by CHALCO, so traders also kept offers firm, making domestic aluminum prices in the RMB 14,900-14,930/mt range. Spot traders were still reluctant to expand discounts even when SHFE aluminum prices moved at low levels. Market consumers increased purchases gradually when aluminum prices were below RMB 15,000/mt.

    Lead:

    In Shanghai lead market, SMM lead prices remained unchanged. As overall commodity market remained optimistic, smelters kept offers unchanged at RMB 15,700/mt, while downstream consumers were in strong position in the market, and deals were mainly made at RMB 15,600/mt, with discounts of RMB 100/mt. The domestic lead prices will depend on LME lead price trends.

    Zinc:

    SHFE zinc prices fell from high levels in the morning. SHFE three-month contract zinc prices faced resistance at RMB 17,000/mt, but received support at RMB 16,500/mt, while SHFE spot-month contract zinc prices failed to stand firm at RMB 16,500/mt. SHFE zinc prices will continue to move at high levels.

    In spot market, SMM #0 zinc prices were RMB 16,200-16,300/mt, up RMB 200/mt from yesterday levels, and spot discounts against three-month contract were RMB 500/mt. Both smelters and traders were eager to move goods, with offers firm at RMB 16,300/mt, but the higher zinc prices around RMB 16,300/mt hampered downstream purchasing interest, leading to general transactions.

    Tin:

    In Shanghai tin market, low-end tin holders continued to move goods at lower prices, while high-end tin ("YT" brand) holders reduced offers to move goods, but transactions remained weak. Traders were unwilling to sell goods due to limited profit margins. Market prices continued to move in the RMB 116,500-118,000/mt range.

    Nickel:

    In Shanghai nickel market, Jinchuan Group reduced nickel ex-works prices by RMB 3,000/mt to RMB 129,000/mt today, and sold goods at RMB 130,000/mt in an attempt to generate cash, while lower traded prices for Russian nickel were RMB 129,000/mt. In this context, imported nickel holders faced great sales pressure amid weak market consumption.

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