SMM Morning Review - 2011/2/21 Copper Market

SHANGHAI, Feb. 21 (SMM) –The People's Bank of China announced on February 18th to raise the requirement reserve ratio by 0.5 percentage points from February 24th. The news dragged LME copper prices down to USD 9,720/mt, but any declines were limited. However, the news didn't change the optimistic players' outlook, and they continued to hold long positions due to expectations of positive demand this year. The US dollar index fell to 77.52, helping support copper prices.  A weak US dollar and rising equities prices helped offset negative impact from rising SHFE copper inventories and further tightening measures in China. As a result, LME copper market overnight finally rebounded and narrowed declines, ending at USD 9,827/mt, down USD 51.3/mt, or a drop of 0.52%. Inventories were up 725 mt.

During Monday's Asian trading hours, the US dollar index is expected to move between 77.3-77.9, and SHFE three-month copper contract prices will fluctuate in the RMB 74,000-75,300/mt, and LME copper prices will fluctuate between USD 9,760-9,900/mt.