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SMM Morning Review - 2011/2/24 Copper Market
Feb 24,2011 09:51CST
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Source:SMM

SHANGHAI, Feb. 24 (SMM) –Industrial new orders in the euro zone rose by 2.1% in December, the European Union statistics office reported on February 23rd. The result was better than expected, as strong demand in France and Italy offset falling orders in Germany. The US crude oil futures prices surged to USD 100/bbl, as soaring energy prices from concerns over Libya's supply will add to inflation, which will force China and other major consumers to raise interest rate to cope with rising inflation, weighing on metal outlook.  Meanwhile market worries that the political unrest in Libya will likely spread into other countries in North Africa and Middle East will slow down the economic recovery, and this will depress demand for base metals. Hence, investors sold off risky products, and bought bonds and gold for risk aversion. In this context, the US equities closed significantly lower for two consecutive day, with the three major indexes all finishing down. Despite declines in LME copper inventories rarely seen recently, the political unrest continued to negatively affect copper prices. Therefore, the LME copper market overnight finally closed at USD 9,465/mt after down as low as 9,365/mt, down USD 75/mt, or a drop of 0.79%, standing above the 60-day moving averages.

During Thursday's Asian trading hours, the US dollar index is expected to move between 77.1-77.5, and SHFE three-month copper contract prices will fluctuate in the RMB 71,300-72,800/mt, and LME copper prices will fluctuate between USD 9,400-9,530/mt.

 

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