SHANGHAI, Sep. 25 (SMM) – LME copper prices climbed higher continuously during Chinese Mid-Autumn Day holiday, supported by a weak US dollar and strong demand, approaching the USD 8,000/mt mark. The US Federal Reserve sent a message that a more loose monetary policy will be taken if necessary, to boost domestic economy. Market anticipated that the US dollar will weaken if the US buys government bonds to stimulate economy. The announcement of soft economic data in the US later further added to market concerns, sending the US dollar index to 79.2. Meanwhile, LME copper inventories dropped further, and LME cash copper prices moved to backwardation. Improved demand and a soft US dollar supported higher LME copper prices when Chinese market was closed for the holiday, helping LME copper prices reach as high as USD 7,990/mt.
In this context, SMM believes that LME copper market will likely test a year high level of USD 8,030/mt after trading resumes in China’s domestic copper market.
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