SMM Base Metals Market Daily Review (2015-6-18)

SHANGHAI, Jun. 19 (SMM)--
Copper:
SHFE 1508 copper contract prices started at RMB 41,940/mt for night trading Wednesday and fell to RMB 41,620/mt before closing at RMB 41,670/mt, down RMB 190/mt.

August-delivery SHFE copper contract bounced back Thursday as shorts closed positions, touching RMB 42,240/mt in the afternoon and ending the daytime trading at RMB 42,080/mt, up RMB 220/mt. Positions declined 10,658 and trading volumes grew 8,194 lots.

Spot copper quoted at premiums of RMB 200-220/mt to SHFE 1507 copper contract Thursday morning. Traded prices were RMB 42,240-42,520/mt for standard-quality copper and RMB 42,260-42,560/mt for high-quality copper.

Goods holders offered higher spot premiums after SHFE copper bounced back, and low-priced goods were soon consumed. Later, low selling interest left tight supply in the market. Dealers sourced goods actively and some downstream buyers also entered the market with prices leveling out, enlivening spot market.

Aluminum:
SHFE 1508 aluminum contract prices opened at RMB 12,705/mt Wednesday evening, then slid to a low of RMB 12,580/mt, but rallied to RMB 12,615/mt, and closed at RMB 12,600/mt. Trading volumes were 9,542 lots, and total positions decreased 232 to 122,740. SHFE 1508 aluminum contract prices climbed above moving averages Thursday morning, but met resistance at RMB 12,685/mt, and closed at RMB 12,675/mt, down RMB 30/mt or 0.24%. Trading volumes were 22,242 lots, and total positions decreased 2,172 to 120,800. Positions of SHFE 1509 aluminum contracts grew noticeably.

SHFE spot-month aluminum contract prices rose slightly on Thursday. Spot aluminum prices in Shanghai were RMB 12,570-12,580/mt, with spot discounts of RMB 60-70/mt. Mainstream prices in Wuxi were RMB 12,550-12,560/mt, with RMB 12,600-12,610/mt in Hangzhou. Downstream purchases were made based on as needed basis, despite weak aluminum prices. Cargo holders sold proactively, but downstream buying interest was low, leaving trading quieter. Quotes for spot-month SHFE aluminum were stable in the afternoon, with transactions muted.

Zinc:
SHFE 1508 zinc contract prices opened at RMB 16,000/mt Wednesday evening, then dropped to RMB 15,830-15,870/mt, and closed at RMB 15,845/mt, down RMB 160/mt or 1%. Trading volumes increased 24,340 to 50,464 lots, and total positions declined 306 to 120,000. SHFE 1508 zinc contract prices fluctuated around RMB 15,880/mt after opening on Thursday, touching RMB 15,935/mt in the afternoon and closing at RMB 15,885/mt, down RMB 120/mt or 0.75%. Trading volumes decreased over 10,000 to 84,770 lots, and total positions declined 3,532 to 117,000. SHFE 1508 zinc contract prices will remain on the downward track.

#0 zinc prices were between RMB 16,880-16,920/mt, RMB 10/mt below or RMB 30/mt above SHFE 1508 zinc contract prices. #1 zinc prices were RMB 16,860-16,870/mt. SHFE 1508 zinc contract prices fluctuated around RMB 15,880/mt during 9:00-10:15 am, with spot premiums of RMB 20-30/mt. Downstream buying interest was low. SHFE 1508 zinc contract prices rose RMB 20/mt during 10:30-11:30 am, with spot prices ranging from RMB 10/mt below to RMB 10/mt above SHFE 1508 zinc contract prices. This allowed cargo holders to sell actively, leading to ample supply. Arbitrage traders, however, lacked buying interest. Some downstream buyers replenished stocks modestly, allowing overall transactions to improve. SHFE 1508 zinc contract prices fluctuated between RMB 15,880-15,930/mt in the afternoon, with spot prices ranging from RMB 10/mt below to RMB 20/mt above SHFE 1508 zinc contract prices.

Lead:
SHFE 1508 lead opened Wednesday evening session at RMB 12,750/mt and hovered between RMB 12,740-12,760/mt, to finish up RMB 15/mt at RMB 12,755/mt.

The contract rebounded to RMB 12,990/mt on Thursday and closed the day at RMB 12,985/mt, up RMB 245/mt or 1.92%. Trading volumes rose 2,314 to 6,972 lots whereas positions dropped 474 to 13,550.

Spot lead premiums narrowed to RMB 400/mt to SHFE 1508 lead for Tongguan and Chengyuan brands with the price at RMB 13,350/mt, versus RMB 13,200/mt for Shuangyan (packed in iron) brand.

Lead smelters shipped slight goods out June 18 and market was mainly filled with shipments from smelters June 17. SHFE 1508 lead surged RMB 200/mt yesterday, but downstream buyers did not source goods aggressively owing to weak orders. Some small and medium smelters will start a vacation before the Dragon Boat Festival and large smelters had little demand for building stocks. Trades thus were poor.

Henan’s branded lead was RMB 50-100/mt lower than SMM #1 lead average price. Some hedged goods flowed into market in Guangdong, increasing local lead availability and the prices quoted at RMB 13,150-13,300/mt. Deals failed to pick up in Hunan and Jiangxi.

Tin:
SHFE 1507 tin contract prices hovered near RMB 112,200/mt during night trading Wednesday and closed at RMB 112,200/mt.

The most active SHFE tin contract opened at RMB 112,390/mt Thursday and increased on falling short positions. In the afternoon, the prices stabilized and ended at RMB 112,510/mt, gaining RMB 780/mt. Positions rose to 3,462 and trading volumes were 768 lots.

Spot tin prices held steady at RMB 111,800-113,000/mt on Thursday. Goods of Yunnan Tin traded at RMB 112,500-113,000/mt, and those of some other brands from Yunnan were about RMB 112,000-112,500/mt. Spot supply remained limited, but some traders reported improving transactions.

Nickel:
SMM #1 nickel prices were between RMB 94,400-96,400/mt. Premiums of Jinchuan nickel against the most actively traded contracts on the Wuxi electronic trading remained around RMB 900/mt. Demand from both traders and downstream buyers weakened on falling nickel prices. When combined with the off-season for stainless steel, trading volumes are expected to decline further. Traded prices were between RMB 94,400-96,300/mt. Nickel futures prices lacked ability to rebound in the afternoon, and both traders and downstream buyers are pessimistic toward nickel prices, with demand soft and traded prices between RMB 94,300-96,300/mt.