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SHANGHAI, Nov. 23 (SMM) –
Copper
As LME copper prices still lacked directions overnight, SHFE 1302 copper contract, the most active one, opened marginally RMB 30/mt up at RMB 56,100/mt Thursday. Chinese domestic markets remained weak, but HSBC reported positive manufacturing data for October, causing the contract to experience a round of relatively big fluctuations following the opening. SHFE copper prices later suffered resistance at RMB 56,180/mt, but won technical support at the RMB 56,000/mt level before moving narrowly between RMB 56,020-56,070/mt in the afternoon. SHFE 1302 copper contract settled RMB 30/mt or 0.05% lower at RMB 56,040/mt, with trading volumes and positions down 62,626 lots and 5,812 lots, respectively. The most active copper contract continued to shift. The trading range for SHFE copper narrowed further with support at the lows but resistance at the highs.
SHFE copper prices rose slower than LME copper, causing the SHFE/LME copper price ratio to fall quickly. Imported copper supply decreased as a result. Spot copper cargo-holders continued moving goods for cash, keeping spot copper discounts between negative RMB 0-80/mt in Shanghai in the morning business. Traded prices for standard-quality copper were between RMB 55,900-55,950/mt, and RMB 55,960-56,050/mt for high-quality copper. Overall market trading sentiment was cautious, and overall market supply remained abundant. Cargo-holders of high-quality copper were unable to maintain premiums, while those of standard-quality copper were forced to expand discounts. Market transactions were still limited. In the afternoon, as SHFE copper prices fluctuated in a narrow range, spot copper market activity was not seen to improve. Price quotes and actual traded prices were also little changed from morning levels.
Aluminum
The SHFE 1301 aluminum contract hovered around RMB 15,265/mt after a low opening at RMB 15,255/mt on November 22. The most active contract recovered some losses at the tail of trading as shorts closed positions. Finally, the three-month contract closed flat at RMB 15,290/mt. Positions increased by 28 lots to 50,814 lots. HSBC China flash PMI for November rebounded significantly and rose above 50, but consumption will remain sluggish in the near term and this will deepen market pessimism. As such, the contract for January delivery should continue to stay below RMB 15,300/mt.
Spot aluminum was mainly traded between RMB 15,110-15,140/mt in Shanghai on Thursday, with discounts between RMB 50-80/mt. Low-iron aluminum traded between RMB 15,180-15,200/mt. The current-month contract on the SHFE was pressured under RMB 15,200/mt and spot aluminum prices extended losses, triggering strong bearish sentiment. Cargo holders were in a hurry to move goods, but middlemen and downstream processors were wary of buying, leaving traded prices hovering near RMB 15,120/mt. In the afternoon, the current-month contract was mired and narrowed losses at the tail of trading. Traders remained active in moving goods, with quotations mainly between RMB 15,100-15,120/mt. Few purchases were made by downstream producers and only a limited number of middlemen purchased at the bottom.
Lead
Although HSBC flash China PMI for November stood above 50 for the first time a year to 50.4, the SHFE 1301 lead contract price followed a weak trend after opening at RMB 15,280/mt Thursday, with resistance at the 5-day moving average. In the afternoon, the lead contract fell slightly to RMB 15,235-15,250/mt due to the depressed Chinese stock markets and ended the day at RMB 15,240/mt. Trading volumes were down 4 lots to 120 lots, and positions dropped 4 lots to 2,460 lots.
SHFE lead prices continued to move within a narrow band Thursday, and spot lead prices in China changed little due to weak demand. Chihong Zn & Ge and Nanfang were quoted at RMB 14,850-14,860/mt, with spot discounts of RMB 380-400/mt over the 1301 SHFE lead contract price. Mengzi was mainly quoted at RMB 14,780/mt, and Shenqian was offered at RMB 14,760/mt. Risk aversion in the market was on the rise and buying interest remained low, leaving trading unimproved.
Zinc
On Thursday, HSBC released China’s preliminary November PMI was 50.4, easing concerns due to the failure of eurozone finance ministers reaching a deal on Greece’s problem. SHFE three-month zinc contract prices opened at RMB 14,970/mt, and generally moved around RMB 14,980/mt during the day, touching RMB 15,020/mt in the afternoon and finally closing at RMB 14,995/mt, up RMB 40/mt.
Discounts of #0 zinc against SHFE three-month zinc contract prices were between RMB 200-240/mt, with traded prices between RMB 14,750-14,770/mt. #1 zinc prices were majorly around RMB 14,730/mt. Imported zinc supply was ample but was unpopular due to soft prices. Smelters began to move goods modestly due to cash flow problems at the end of the month, and traders released goods due to narrowing discounts, but most downstream buyers were cautious, with transactions muted.
Tin
Mainstream spot tin prices in Shanghai fell along with the slipping LME tin prices Thursday to RMB 147,000-148,000/mt. Traded prices for Nanshan, Jinlong, Weitai, and Nancang were mainly around RMB 147,000/mt, with some goods of Jinlong traded at RMB 146,800/mt. Deals for well-known brands including Yunxi and Yunheng were made at RMB 148,000/mt. Some goods of Yunxi were quoted at RMB 148,500/mt but transactions were scarce. Trading was light and market concerns were rekindled by the European debt crisis.
Nickel
Jinchuan Group raised ex-works nickel prices by RMB 2,000/mt, to RMB 118,000/mt on Thursday. Following Jinchuan Group price hike, mainstream traded prices of spot Jinchuan nickel prices were between RMB 119,200-119,500/mt, and Russian nickel were between RMB 118,400-118,700/mt. Transactions were brisk as arbitrage opportunities emerged at domestic electronic exchanges. During the afternoon trading hours, mainstream traded prices of nickel from Jinchuan Group rose to RMB 119,500-119,800/mt, but Russian nickel prices remained unchanged. Transactions were still brisk.
November 23, 2012
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Shanghai Metals Market(SMM) Is The Leading Metals Information Provider in China.
November 23, 2012