SMM Copper Market Morning Review (2015-9-9)

SHANGHAI, Sept. 9 (SMM) – LME copper moved higher to USD 5,380/mt overnight thanks to the news of production cut by Glencore and improving sentiment. LME copper finally closed at USD 5,352/mt, up 4.23%.

A rally in Chinese stock market and upbeat employment data from the US improved market sentiment.

SHFE 1511 copper also entered the upside track during Tuesday evening session responding to a growth in LME copper. SHFE copper gapped higher at RMB 40,000/mt and then advanced to RMB 41,110/mt before ending at RMB 40,880/mt, gaining RMB 80/mt. Positions increased 14,692 to 236,178 with trading volumes roughly 420,000 lots.

Supportive factors, including the September-October peak demand season, news of cut in copper output and China’s pro-growth measures, will support SHFE copper in near future.

LME copper should extend gains to move in USD 5,320-5,400/mt during Asian trading hours. SHFE 1511 copper may fluctuate between RMB 40,600-41,300/mt on Sept. 9. SHFE copper surged but still underperformed LME copper, decreasing the SHFE/LME copper price ratio.

In China’s spot market, speculative traders may still move goods for profits and this will keep spot copper in discounts of RMB 50-100/mt against SHFE 1509 copper on Wednesday.Some traders will not ship hedged goods out as they are more willing to deliver goods to warehouses on the SHFE with the large rise in SHFE copper.