SMM Copper Market Morning Review (2015-6-10)

SHANGHAI, Jun. 10 (SMM) – Base metal markets picked up Tuesday. LME copper prices hit USD 6,015/mt but failed to end above the 5-day moving average, only closing at USD 5,967/mt.

China’s CPI growth was at its lowest in four months in May, while PPI was still in the negative growth territory. Markets expect CPI rise faster in H2 with economy stabilizing, but some investors pin their hope on more stimulus measures.

US crude oil prices climbed 3% overnight as the Energy Information Administration raised forecast for WTI oil prices this year.

S&P lowered credit rating for several European banks, slashing the Deutsche Bank, the Royal Bank of Scotland and Commerzbank to “BBB+”, and Barclays Bank from “A” to “A-”.

SHFE 1508 copper contract prices started at RMB 43,320/mt for Tuesday’s night session and followed LME copper up to RMB 43,520/mt but met resistance at this level. The most active SHFE copper contract gave back earlier gains and finished the night session at RMB 43,250/mt, up RMB 50/mt. Positions fell by 70 and trading volumes were less than 100,000 lots.

Markets now expect China’s lending, consumption and investment to be weak, but are upbeat about US retail sales due out this Thursday. SHFE 1508 copper contract may trade at RMB 43,000-43,500/mt on June 10. Spot copper premiums should remain at RMB 50-80/mt.