Copper

The most active SHFE 1503 copper contract started lower at RMB 44,210/mt in Monday’s night session, against a tumble in LME copper and crude, and closed down RMB 540/mt at RMB 44,710/mt. During the night session, trading volumes for the most active contract surged to nearly 290,000 lots, while positions gained 346. Trading volumes for the SHFE 1504 copper contract amounted to some 100,000 lots, while positions increased 8,474.

SHFE copper swung by less than RMB 200/mt around RMB 44,800/mt on Tuesday, meeting resistance at RMB 44,900/mt, and finished down RMB 450/mt, or 0.99%, at RMB 44,800/mt. Trading volumes for the SHFE 1503 copper contract increased 259,000 lots, while positions shed 14,618. Trading volumes for the SHFE 1504 copper contract gained 106,000 lots, while positions added 12,280 lots.

Spot copper in Shanghai was quoted at a RMB 20-80/mt premium to the SHFE 1501 copper contract. Standard- and high-quality copper sold for RMB 45,620-45,680/mt and RMB 45,650-45,730/mt, respectively. Supply was ample as hedged goods hit the market following a fall in SHFE copper and as a rise in the SHFE/LME copper price ratio allowed for an influx of imported copper. Middlemen became less active due to little chance of arbitrage, while downstream producers bought mostly as needed, leaving trading quiet.

SHFE copper remained in a narrow range in the afternoon trading session. Copper supply was still sufficient as cargo holders of high-quality copper sold at a lower premium. The price gap between standard- and high-quality copper narrowed. Spot copper was largely offered at a RMB 20-60/mt, with traded prices little changed.

Aluminum

On Monday night, SHFE 1503 aluminum contract slid to RMB 12,800/mt after starting at RMB 12,860/mt, and finished the night session at RMB 12,805/mt.

On Tuesday, the most active contract followed other base metals up to RMB 12,880/mt as prices have fallen to some investors’ psychological level. The contract ended at RMB 12,845/mt. Trading volumes totaled 56,276 lots, with positions up 3,136 to 160,562. Technically, there is still room for prices to fall.

Spot aluminum largely traded between RMB 12,810-12,820/mt in Shanghai on Tuesday, premiums of RMB 40-50/mt over SHFE 1501 aluminum contract, versus RMB 12,780-12,790/mt in Wuxi and RMB 12,820-12,830/mt in Hangzhou. Some cargo holders held back goods against falling prices. Downstream producers still stayed out of the market, waiting for prices to fall further. In the afternoon, trading was subdued.

Lead

Lead for March delivery on the Shanghai Futures Exchange, the most active contract, dipped as low as RMB 12,140/mt in Monday’s night session after opening at RMB 12,290/mt and finished down RMB 75/mt at RMB 12,325/mt. Trading volumes for the SHFE 1503 lead contract totaled 7,326 lots, while positions increased 672 to 19,630.

SHFE lead initially dipped to RMB 12,270/mt, but recovered all losses subsequently to close up RMB 10/mt at RMB 12,410/mt.

Supplies from Yuguang in Shanghai traded Tuesday at RMB 12,530/mt, an around RMB 240/mt premium to the most active SHFE 1503 lead contract. Traded prices were RMB 12,520-12,530/mt for Chihong Zn & Ge and Shuangyan, RMB 12,510/mt for Nanfang and Chengyuan warehouse warrants, and RMB 12,500/mt. Lead warehouse warrants dominated the market on Tuesday with light supply. Downstream producers went bargain-hunting to replenish input stocks.

Zinc

SHFE 1503 zinc contract prices opened lower at RMB 16,525/mt Tuesday evening, then tested RMB 16,800/mt, and closing at RMB 16,695/mt, down RMB 50/mt or 0.3%. Trading volumes were 150,132 lots, and total positions increased 1,544 to 162,062. SHFE 1503 zinc contract prices opened at RMB 16,715/mt on Tuesday, and proved resilient, hovering around RMB 16,700/mt and closing at RMB 16,740/mt, down RMB 5/mt or 0.03%. Trading volumes decreased 100,548 to 89,356 lots. Total trading volumes were up 49,584 to 239,488 lots, and total positions increased 3,456 to 163,974. SHFE 1503 zinc contract prices are expected to be resistant to declines this evening.

#0 zinc prices were between RMB 16,890-16,950/mt, with spot premiums of RMB 200-240/mt against SHFE 1503 zinc contract prices. #1 zinc prices were RMB 16,800-16,820/mt. SHFE 1503 zinc contract prices fluctuated between RMB 16,700-16,710/mt, down nearly RMB 100/mt. Smelters sold actively, while imported zinc supply also increased. Traders purchased modestly as they expected spot premiums will narrow. Overall trading muted on small SHFE zinc price volatility. Spot premiums only widened RMB 10-20/mt. Downstream buying interest remained weak. Huize #0 zinc prices were RMB 16,940-16,960/mt, RMB 240-250/mt above SHFE 1503 zinc contract prices. Shuangyan #0 zinc prices were RMB 16,930-16,950/mt, RMB 230-240/mt above SHFE 1503 zinc contract prices. Qilin and Qinxin zinc prices were between RMB 16,900-16,920/mt, RMB 200-210/mt above SHFE 1503 zinc contract prices. Baohui and Tiefeng #0 zinc prices were between RMB 16,890-16,900/mt, RMB 190-200/mt above SHFE 1503 zinc contract prices. SMC and Indian zinc prices were between RMB 16,850-16,860/mt, RMB 150/mt above SHFE 1503 zinc contract prices. Norwegian zinc prices were between RMB 16,820-16,840/mt, RMB 130/mt above SHFE 1503 zinc contract prices. SHFE 1503 zinc contract prices remained steady in the afternoon, with spot premiums of Shuangyan zinc between RMB 230-240/mt, which traded between RMB 16,950-16,970/mt.

Tin

In Shanghai spot tin market, trading activity diminished on Tuesday following stockpiling a day earlier. Some traders stayed out of the market out of bearishness. Most deals closed between RMB 127,000-130,500/mt. Nanshan and Jinlong brand tin traded between RMB 126,500-127,500/mt, RMB 128,000-128,500/mt for Tianti and Yunxiang brand tin, and RMB 128,500-129,500/mt for Yunxi brand tin.

Nickel

SMM #1 nickel prices were between RMB 108,200-108,500/mt, while LME nickel prices rebounded to the 5-day moving average. Spot prices rose in the morning, and downstream buyers purchased modestly, with transactions quiet and traded prices between RMB 108,000-108,400/mt. Prices climbed in the afternoon, causing downstream buying interest to weaken. Traders also withdrew, with traded prices between RMB 108,600-108,900/mt.