SHANGHAI, May 25 (CBI China) -- Boosted by the soft US dollar and decreasing inventories, LME copper price increases sharply last Friday. Today, SHFE copper price moved upward. SHFE 908 contract copper price opened at RMB 36,650/mt, but then fluctuated around RMB 36,500/mt after meeting resistance, then experienced a round of rise in the afternoon, and closed at RMB 36,780/mt. The trading volumes shrank compared to previous trading day, and the position declined by 15,054 lots. Today, the spot price was in the RMB 37,490-37,590/mt range, with the premium for spot goods in the RMB 300-400/mt range. As the factories began building up stocks before the holiday, the market transactions were good.
Last week, Standard & Poor lowered the credit rating of Britain, triggering the market concerns over the credit rating of US. In this context, the US dollar became weak, creating supports for the metal prices. Currently, copper price remained stable, and the continuous declines in LME and SHFE inventories supported copper price, but the orders from copper tube and copper cable downstream producers declines due to the approach of seasonal low demand period, dampening the copper price. Technically, SHFE three-month contract copper price faced some resistance at RMB 37,000/mt, and will likely fluctuate widely in the short term.
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