SMM Daily Review - 2010/10/27 Scrap Copper Market

SHANGHAI, Oct. 28 (SMM) – SHFE copper market was on a downward track on Wednesday due to the rising US dollar index, down by 0.93%, but remained above the 5-day moving average. SMM believes it is inevitable to see SHFE copper price corrections in the near future, despite of a long-term bullish trend.

Trading sentiment in the scrap copper market remained lackluster, as downstream producers remained wary of purchases towards high-priced goods, and as traders were reluctant to sell goods at lower prices. In marked contrast to the stagnant trading sentiment in the scrap copper market, smelters which use scrap copper as their materials are able to make strong profits recently due to cost advantages from relatively low-priced scrap copper.

Now, the struggle between longs and shorts is continuing. China's Central Government may announce stricter policy in near future to cool down the strong speculations after the interest rate hike. Hence, a cautious attitude should be adopted due to increased market risks. 

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