SHANGHAI, Mar. 8 (SMM) – On March 7th, crude oil prices climbed to nearly a 2 and 1/2 year high of 106.95/bbl due to market concerns over the turmoil in Libya and other major oil producing countries. With inflation concerns accelerating, investors chose to sell off base metals for safety concerns. The COMEX market also reported technical selling-offs. Meanwhile, markets believe that soaring food and energy prices are damaging the economy in China and other new-emerging countries. China's measures to tighten credit and slow the economic growth will reduce demand for base metals. In addition, the US dollar index gained 0.4%, and LME copper inventories continued to rise, both further weighing down LME copper prices. As a result, LME copper prices dived to USD 9,469/mt, falling below USD 9,500/mt, with the daily high and low-end price gap reaching USD 453/mt. Finally, LME copper prices closed at USD 9,527/mt, down as much as USD 318/mt, with prices down below the 60-day moving averages of USD 9,598/mt, registering the largest daily decline in four months.
During Tuesday's Asian trading hours, the US dollar index is expected to move between 76.3-76.7, and LME copper prices will fluctuate in the USD 9,490-9,690/mt range, and SHFE three-month copper contract prices will move between RMB 72,200-73,200/mt.
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