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SMM Base Metals Market Daily Review (2014-12-15)

Release time:2014-12-16

Dec 16, 2014 02:01 GMT   Source:SMM

 

SHANGHAI, Dec. 16 (SMM) – Copper Copper for February delivery on the Shanghai Futures Exchange, the most active contract, started at RMB 46,290/mt in last Friday’s night session and then advanced to RMB 46,600/mt. The price of the SHFE 1502 copper contract finished up RMB 210/mt at RMB 46,570/mt. Trading volumes for the most active contract fell to some 70,000 lots, while positions gained 1,330 lots. The SHFE 1502 copper contract initially surged to RMB 46,820/mt on Monday and closed up RMB 350/mt, or 0.75%, at RMB 46,710/mt. The SHFE 1412 copper contract rallied as high as RMB 48,600/mt in the afternoon trading session and ended up RMB 800/mt, or 1.7%, at RMB 47,900/mt. Trading volumes for the most active contract tumbled 32,634 lots, while positions shrank 10,338 lots. Spot copper in Shanghai was quoted Monday at a RMB 200-300/mt discount to the SHFE 1412 copper contract. Standard- and high-quality copper sold for RMB 47,000-47,100/mt and RMB 47,030-47,150/mt, respectively. The price gap between the SHFE 1412 and 1501 copper contracts rose to over RMB 400/mt on Monday. Spot copper supply remained sufficient as cargo holders rushed to sell in the last trading day for the front-month contract and the stable SHFE/LME copper price ratio allowed inflows of imported copper. The price gap between standard- and high-quality copper expanded. Some middlemen went bargain-hunting, while downstream producers bought only as needed. The price gap between the SHFE 1412 and 1501 copper contracts surged to more than RMB 1,000/mt in the afternoon trading. Spot copper was quoted at a RMB 200-250/mt premium to the SHFE 1501 copper contract and traded at RMB 47,150 -47,350/mt in light volumes. 35% of market players surveyed by SMM expect copper prices to rebound this week, with LME copper standing above USD 6,250/mt and SHFE copper rising to RMB 47,000/mt. Technically, LME copper has increased above the 5-day and 10-day moving averages, with technical indicators pointing upwards, leading these players to believe prices will test resistance at the 20-day moving average. 56% of industry insiders hold that LME copper will trade at USD 6,420-6,520/mt and SHFE copper prices will move between RMB 46,200-47,000/mt, arguing that mixed data from the US and slower increase in the US dollar index will limit copper price moving range. A latest report developed by economists at the Research Bureau of the People’s Bank of China indicates that China’s real GDP growth may slow to 7.1% next year due mainly to slower housing investment. However, it was also pointed out that urban employment will remain stable. In addition, markets are now optimistic that the PBOC will pump liquidity by the year’s end, but prediction that Chinese stock prices are unlikely to rise further given increasing money needs by the end of the year will hurt market confidence. The combination of these factors is expected to leave copper prices range-bound. The remaining 9% of market players see prices to decline this week considering continued slides in crude oil and gold. Crude oil prices have fallen below USD 60/bbl and showed no sign of stabilizing. Besides, US shares also slipped with support still nowhere in sight, which will add to a drag on copper. In China’s spot market, companies will be busy settling account in the last month of the year, dampening spot trades. As such, these players believe LME and SHFE copper will fall to USD 6,400/mt and RMB 46,000/mt this week, respectively. Aluminum Last Friday night, SHFE 1502 aluminum contract......

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