Author：Site  Source：Original Site  Click to rate：1133  Post time：2014-08-19

Tags: SHFE copper prices,  SHFE aluminum prices,  aluminium circle,  SHFE zinc prices,  Shanghai tin prices,  Shanghai nickel prices

SHANGHAI, Aug. 19 (SMM) –    Copper  The most active SHFE 1410 copper contract rose above the RMB 49,000/mt mark after starting last Friday’s night session at RMB 48,850/mt, and closed up RMB 220/mt at RMB 49,050/mt. During the night session, trading volumes for the most active contract fell slightly to some 90,000 lots, and positions gained by 3,180 lots.   On Monday, SHFE copper rose further to RMB 49,100/mt, meeting resistance at RMB 49,230/mt, but fell at the tail of the trading to end up RMB 140/mt, or 0.29%, at RMB 48,970/mt. Trading volumes for the SHFE 1410 copper contract shrank by 87,960 lots, and positions contracted by 3,672 lots. The price of the red metal should test base support in the near term, with negative technical indicators.   In the Shanghai physical market, copper was offered Monday at a RMB 80-160/mt premium over the SHFE 1409 copper contract. Traded prices were RMB 49,480-49,500/mt for standard-quality copper and RMB 49,480-49,580/mt for high-quality copper.   As SHFE copper prices rebounded, cargo holders quoted high-quality copper at as high as a RMB 250/mt premium, but no transactions were reported. Quotations for hydro-copper and standard-quality copper were close to those for high-quality copper. Middlemen evinced moderate buying interest, while downstream producers barely entered the market, holding that the rebound in copper prices will be short-lived. Trading activity was moderate at low prices on Monday. Physical copper premium is likely to fall further for the foreseeable future.   As copper prices fell slightly during the afternoon trading session, some middlemen entered the market to buy while building short positions on the futures market. Helped by decreasing supply, copper was offered at a higher premium of RMB 120-200/mt, with transactions done mostly by middlemen. 42% of market players contacted by SMM are pessimistic about this week’s copper prices due to lousy European data which exerted a drag on the euro and strong technical pressures.   In physical copper markets, downstream buyers remained unwilling to buy during the offseason. On the supply front, China’s refined copper output increased 1.6% on the month and 16.5% year-on-year in July after completion of smelting facility maintenance. In addition, larger quantities of imported copper are flowing into Chinese domestic markets due to the higher SHFE/LME copper price ratio. The weak market fundamentals will also weigh down prices. Thus, many expect LME copper prices to test support at USD 6,800/mt and SHFE copper prices to slip to RMB 48,500/mt.   38% of industry insiders predict LME copper prices will remain at USD 6,820-6,900/mt and SHFE copper prices will be RMB 48,800-49,200/mt, citing mixed data from the US and narrowing moving range for gold and crude oil prices. In addition, risk aversion arising from geopolitical tensions will leave investors cautious.   The remaining 20% expect a rebound in copper market this week with LME copper climbing above USD 6,950/mt and SHFE copper prices rising above RMB 49,500/mt, due partly to falling copper stocks reported by LME and SHFE. The CFTC report indicated a rise in net long positions to 7,506 lots for the week ending August 5. LME reported that bullish bets accounted for 22% of total for the week ending August 8.   On the other hand, the US dollar index is expected to meet strong technical resistance, so any potential decline in the US dollar index will lend support to copper prices.   In China, rumors swirled that one bank in Shanghai may loosen control over issuance of mortgage. Shanghai will be the first mega city in China to relax restrictions on house purchases should the rumors turn out true, and other large cities may follow suit. This caused market players to guess the central government will adjust macroeconomic policies in the second half of the year. That being said, anticipation for interest rate cuts waned as market showed some positive signs following the modest stimulus. These reports did give a boost to China’s stock market, which will benefit the commodity market.  

from metal.com