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SMM Morning Review - 2011/2/10 Copper Market
Feb 10,2011 10:30CST
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SHANGHAI, Feb. 10 (SMM) – On Wednesday, Bernanke, chairman of the US Federal Reserve, published a statement, pointing out high unemployment rate and low inflation in the US despite stronger economic recovery. In response, the US stocks fluctuated with sluggish transactions, and rose at the tail of trading, with mixed closure finally. The Dow Jones Industrial Average closed higher for the eighth day, but S&P 500 and Nasdaq closed lower; the US dollar index closed down, touching a low of 77.5 in the session. LME copper prices were dragged down by sells in the SHFE copper market due to higher interest rate in China, but bargain-hunting and a weaker US dollar index restrained losses in the LME copper markets. However, LME copper prices fell to the one-week low amid concerns on high inflation and mild demand in China, finally slumping below RMB 10,000/mt. LME copper inventories increased by about 4,500 mt, with prices for three-month delivery closed at USD 9,923/mt, down USD 107/mt, or down 1.07%. LME copper positions rose by 251 lots, and trading volumes decreased by 2,315 lots, indicating weaker demand outlook. SMM expects the US dollar index to fluctuate between 77.5-77.9, and SHFE copper prices to fluctuate between RMB 74,500-76,000/mt, and LME copper prices to be between USD 9,870-10,010/mt during the Asian trading session on Thursday.

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