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Tags: SHFE copper,  SHFE aluminum prices,  lead prices,  zinc prices,  tin prices,  aluminium sheet

 SHANGHAI, May 6 (SMM) – Copper The most active SHFE 1407 copper contract rallied Monday to RMB 47,920/mt after starting higher at RMB 47,660/mt, boosted by the bottoming out of LME copper prices during the May Day holiday. Dampened by worse-than-expected HSBC’s China manufacturing PMI and a fall in the Shanghai Composite Index, SHFE copper prices sank to a low of RMB 47,520/mt subsequently. The red metal hovered narrowly around RMB 47,600/mt during the afternoon trading session, and finished up RMB 60/mt, or 0.13%, at RMB 47,670/mt. Traded volumes and positions for the SHFE 1407 copper contract contracted 78,644 lots and 5,418 lots respectively. Meanwhile, traded volumes and positions for the SHFE 1408 copper contract expanded 2,236 lots to 5,206 lots, respectively. In the Shanghai physical market, copper was quoted Monday at a premium of RMB 680-850/mt over the nearby SHFE contract. Traded prices were RMB 49,470-49,730/mt for standard-quality copper and RMB 49,550-49,870/mt for high-quality copper. Despite the absence of guidance from LME lead prices, SHFE lead prices still staged a rebound. Imported copper dominated the market as a large amount of this type of copper supply inflated physical supply. Copper premiums initially held steady at RMB 1,000/mt, but fell abruptly afterwards. Cargo holders lowered premiums voluntarily to raise cash, but a majority of market participants stayed on the sidelines. After physical premiums lost around RMB 300/mt subsequently, middlemen largely held a wait-and-see posture. Downstream producers rarely jumped in following declines both in futures and physical markets. Trading activity was rather sluggish on Monday due to volatile prices movements after the May Day holiday. According to SMM’s survey, 60% of participants in copper industry remained cautious towards this week’s copper price trends. The US Q1 GDP rose at its slowest pace in nearly three years on a quarterly basis, but nonfarm payrolls grew at the fastest pace in about two years in April, which was seen as a sign that the country’s recovery was still unsteady. Other major economic indicators also turned out mixed, with consumption, manufacturing PMI, and ADP job data reported upbeat but labor force participation rate back to a 30-year low of 62.8%. These data left the US stocks subdued, lending little support to copper prices. The latest CFTC showed net short positions for copper declined to 13,881 lots for the week ending April 29, an indication that hedge funds were less bearish towards copper prices. Technical indicators, however, pointed to some more downside and weaker support for copper prices. As such, over half of industry insiders surveyed by SMM expected LME copper prices to remain at USD 6,650-6,750/mt this week. 20% of these industry insiders were bearish, believing that LME copper prices would fall below the 20-day moving average and SHFE 1407 copper contract prices would test support at RMB 47,300/mt. China’s stock market is expected remain weak given disappointing economic data and resumption of IPO listing, weighing copper prices on. Now that the SHFE/LME copper price ratio has recovered some, imported copper supply in China’s domestic markets will increase, imposing a ceiling on any rises in spot premiums. In addition, as prices for near-dated SHFE copper contracts remained stronger than those for contracts with longer maturities, distant-month contracts may still suffer from selling pressure.

from metal.com