[Base Metal] SMM Base Metals Market Daily Review (2015-7-22)

SHANGHAI, Jul.23 (SMM) –

Copper

SHFE 1509 copper advanced to RMB 40,110/mt after opening Tuesday evening session at RMB 39,850/mt. But near the session’s end, the contract retreated all the gains to touch a low of RMB 39,800/mt and ended at RMB 39,850/mt, down RMB 130/mt. Positions grew 790 and trading volumes totaled 123,000 lots.

September copper on the SHFE dipped to this week’s low of RMB 39,070/mt during Wednesday trading session and closed the day at RMB 39,150/mt, slipping RMB 830/mt or 2.08%. Trading volumes of SHFE 1509 copper increased 69,858 lots with positions up 11,844. Trading volumes of SHFE 1510 copper jumped 69,992 lots and positions also increased 26,468.

On Wednesday, SHFE copper extended losses. Cargo holders sourced cheap copper in Shanghai market. Trading was active in the morning for delivery of term contract. More buyers favored high-quality copper, leaving price gap between standard-quality and high-quality copper to widen.

With the drop of SHFE copper, spot premiums grew to a recent high. But trades were closed when spot premiums on high-quality copper were driven up above RMB 300/mt. Spot availability increased in market and trades went through a drop after a growth. Copper at RMB 40,000/mt could attract more buyers.   

Spot copper was offered at a premium of RMB 220-300/mt in Shanghai July 22. Traded prices were RMB 40,000-40,400/mt for standard-quality copper and RMB 40,020-40,440/mt for high-quality copper.

Aluminum

SHFE 1510 aluminum contract fell in the afternoon as shorts flooded in, and ended at an intraday low of RMB 12,355/mt. Trading volumes totaled 34,332 lots, and positions were up 11,578 lots to 134,002 lots. 

Aluminum prices were mainly between RMB 12,180-12,190/mt in Shanghai on Wednesday, discounts of RMB 120-140/mt over August aluminum on the SHFE, versus RMB 12,180-12,190/mt in Wuxi and RMB 12,190-12,220/mt in Hangzhou. SHFE 1508 aluminum contract continued falling, triggering bearishness in spot market. Sellers rushed to sell, while processors bought only to need. In the afternoon, trading remained thin. 

Lead

Stronger dollar, concerns over China’s economy and current off-season for consumption, triggering bearishness in market again. SHFE 1510 lead started at RMB 12,915/mt during Tuesday evening session and lurched down to end at RMB 12,820/mt, down RMB 140/mt.

After starting Wednesday trading session, October lead on the SHFE moved stably around RMB12,800/mt and finished the day at a low of RMB 12,700/mt, slipping RMB 260/mt or 2.01%. Trading volumes totaled 2,634 lots and positions jumped 870 to 14,818.

In Shanghai market, Tongguan and Nanfang brands quoted RMB 13,130-13,180/mt RMB 370-400/mt higher than SHFE 1510 lead and RMB 50/mt higher than SHFE 1508 lead. Though some offers quoted as high as RMB 13,200/mt, few deals were made.

Traded prices were RMB 13,000-13,020/mt for Shuangyan brand (packed in iron). YT brand lead from Yunnan’s Yunxi Smelter was offered at a premium of RMB 50/mt over SHFE 1508 lead with traded prices at RMB 13,130-13,160/mt.

Lead prices slipped RMB 100/mt July 22. Lead smelters held back sales. Downstream producers purchased some on July 21 and increased purchase at lows July 22. Trades picked up slightly July 22.

Zinc

SHFE 1509 zinc contract prices opened at RMB 15,550/mt Tuesday evening, then dropped to RMB 15,480/mt with LME zinc price, and closed at RMB 15,510/mt, down RMB 30/mt or 0.19%. Trading volumes decreased 8,434 to 33,854 lots, and total positions grew 68 to 109,108. SHFE 1509 zinc contract prices opened at RMB 15,550/mt, then hovered around RMB 15,300/mt. In the afternoon, SHFE 1509 zinc contract prices plunged to RMB 15,200/mt, then dipped to RMB 15,150/mt, and closed at RMB 15,205/mt, down RMB 335/mt or 2.16%. Trading volumes increased over 27,534 lots to 115,000 lots, and total positions decreased 1,122 to 108,000. SHFE 1509 zinc contract prices are expected to test support from 15,000/mt.

#0 zinc prices were between RMB 15,370-15,480/mt, RMB 0-50/mt above SHFE 1509 zinc contract prices. #1 zinc prices were RMB 15,400-15,420/mt. SHFE 1509 zinc contract prices fluctuated around RMB 15,500/mt after opening, with spot price trading RMB 0-20/mt above the first between RMB 15,480-15,520/mt. SHFE 1509 zinc contract prices fluctuated between RMB 15,410-15,450/mt after 10:00 am, with spot premiums largely unchanged. SHFE 1509 zinc contract prices plummeted RMB 100/mt at the end of trading, with spot premiums expanding to RMB 40-50/mt. Smelters sold normally, and traders also released goods after spot premiums expanded on plunging SHFE zinc price, leading to ample supply. Traders purchased at lower prices, and downstream buying interest improved, causing overall transactions to improve. SHFE 1509 zinc contract prices fell below RMB 15,300/mt in the afternoon, dipping to RMB 15,200/mt. This allowed traders to hold back goods, with spot premiums between RMB 50-70/mt.

Tin

In Shanghai spot tin market, Yunxi brand tin remained plentiful. Mainstream traded prices fell to RMB 110,800-112,000/mt on Wednesday morning. Goods from Yunnan Tin Group traded at RMB 111,500-112,000/mt. In the afternoon, prices for some Nanshan and Yunxi brand tin fell to RMB 110,000/mt after SHFE tin fell. Trading was thin. 

Nickel

SMM #1 nickel prices were between RMB 85,300-86,800/mt. Premiums of Jinchuan nickel against the most actively traded contracts on the Wuxi electronic trading were RMB 700/mt in the morning. Nickel price stabilized in the morning. It was reported the SRB will build nickel stocks, improving nickel purchases, with traded prices between RMB 85,500-86,700/mt. Supply increased in the afternoon as nickel price fell, but purchases declined as the news that the SRB will build nickel stocks had been absorbed. Trading for Russian nickel was better than Jinchuan nickel, with traded prices between RMB 84,800-85,700/mt.