SHANGHAI, Dec. 9 (SMM) – Continuous declines in LME copper inventories and the launch of a physical copper ETF on December 10th left the expectations of supply tightness unchanged. In addition, the extension of the US tax cuts also increased market expectations of the economic recovery in the US. In this context, the US dollar index overnight fell back from 80.4 to close at 80.07. As a result, LME copper prices advanced after experiencing wild fluctuations, with the highest and lowest level of USD 9,011/mt and USD 8,705/mt, respectively. Finally, LME copper prices closed at USD 8,987/mt. Trading volumes dropped by 5,847 lots, and positions were up only by 616 lots, a sign of market caution at high prices. It is worth noting that the premiums for cash metal over LME three-month contracts fell from USD 74/mt to USD 28/mt.
It is expected that LME copper prices will move between USD 8,950-9,050/mt, and SHFE three-month copper contract prices will fluctuate in the RMB 66,100-67,300/mt range on Thursday.
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