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SMM Morning Review - 2011/2/18 Copper Market
Feb 18,2011 09:56CST
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SHANGHAI, Feb. 18 (SMM) –The US Department of Labor announced on Thursday that the US CPI rose 0.4% from a month earlier, higher than the Reuter's projections of 0.3%. The CPI gained 0.2% on a monthly basis excluding food and energy, higher than the expected growth of 0.1%, and up 1.6% on a yearly basis, within Reuter's expectations. The US real earnings fell 0.3% in January, and that was in line with expectations. Affected by the economic results, the US equities kept rising on February 17th, climbing further from a new 2-year high. However, the US initial jobless claims rose 25,000 to 410,000 in the week ending February 12th, and the projections were 400,000, and the data for the previous week was revised from 383,000 to 385,000. The US continuing jobless claims in the week ending February rose to 3.911 million, higher than the expectations of 3.9 million. The data for the previous week revised from 3.888 million to 3.91 million. In addition, market attached great attention to the inflation in the US, and the rising commodity prices triggered market concerns. The negative news left the US dollar in its negative territory at the closing, down as low as 77.88. In this context, technical selling, inflation concerns and record prices depressed demand for copper, weighing on market sentiment, with prices down to USD 9,709/mt. Later, buyers entered the market as the US dollar index moved lower, helping support copper prices at the low level of the daily price range. Finally, LME copper prices closed at USD 9,879/mt, up USD 29/mt, or a gain of 0.29%, holding firm above the 20-day moving averages. However, positions were down sharply by 18,700 lots, and special attention should be paid to the movement. Inventories were up further by 1,400 mt.

During Friday's Asian trading hours, the US dollar index is expected to move between 77.8-78.3, and SHFE three-month copper contract prices will fluctuate in the RMB 74,900-75,700/mt, and LME copper prices will fluctuate between USD 9,830-9,950/mt.


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