SHANGHAI, May 5 (SMM) -- Market worried that the financial aid for Greece may not prevent debt crisis in other euro zone countries, with growing concerns over debt issues in Spain and Portugal. In other news, the US's existing home sales and the growth of factory orders were both better than expected, further increasing market expectations of rising interest rates. In this context, the US dollar index surged, hitting a one year high of 83.64 after reaching as high as 83.52 on May 4th. As a result, the commodity market weakened, and NYMEX crude oil futures for June delivery dropped as much as 4%, down to USD 82.74/bbl, and base metals prices slid across the board. LME nickel sank 6.27%, leading price declines of base metals. LME copper prices hit as low as USD 7,002/mt and closed at USD 7,013/mt, down USD 392/mt, and with slight declines in positions.
Sharp price declines on the LME copper market dampened market confidence, with prices expected to remain weak in the short term. SHFE copper prices are believed to follow price trends of LME copper, but buying interest is expected to be stimulated at RMB 56,000/mt. SMM believes SHFE copper market is expected to be stronger than LME copper market in the short run.
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