45% Producers Optimistic Towards Copper Prices

SHANGHAI, Jul. 26 (SMM) –Regard to recent copper price outlooks, SMM conducted a survey of 20 major domestic electric wire and cable producers. The survey revealed that nearly half of the surveyed producers were optimistic towards the outlook, while nearly half believed copper prices will fluctuate.

Based on the survey, about 45% producers were positive towards copper prices. They believed that against the backdrop of global inflation, copper, with its relatively robust demand, will always increase in the long term. Besides, China’s economy didn’t face a hard landing due to first-half macro regulations, and the GDP remained growing at a 9.6% rate. Without experiencing big changes in fundamentals, copper prices will increase in the long run. 

Approximately 35% producers believed copper prices will not continue gains and will fluctuate at high levels. Purchases on spot copper markets have reduced currently, and all market players are making purchases on an as-needed basis. Besides, current high copper prices are worsening enterprise’s cash flow situations. If copper prices continue to increase, enterprise operation will become more severe. However, with strong buying support at RMB 68,000/mt, fluctuating band of SHFE copper prices will be up, with prices expected to fluctuate around RMB 70,000/mt.  

Only 5% producers were pessimistic towards copper prices. They believed that significant copper price increases currently are mainly driven by cash. If spot copper discounts remain high and consumption keeps weak, SHFE copper prices will lose the support at RMB 72,000/mt and fall.

The remaining 15% producers couldn’t predict on future copper prices.