SHANGHAI, Aug. 3 (SMM) –The labor strike at Chilean copper mine Escondida overnight continued to restrict declines in earlier trading hours and offset market concerns over a slowdown in global economy. Later, the US also announced July car sales grew mildly, easing market expectations towards copper demand prospects. In response, LME copper prices moved higher from previous low levels, climbing to USD 9,725/mt. However, near the tail of trading, Moody's confirmed the US 3A credit rating, but still placed a negative outlook after the Congress passed a debt deal to avoid default, sending the US dollar index up to 74.73 against a bask of major currencies. Meanwhile, the US announced consumer spending fell by 0.2% unexpectedly in June, registering the first decline in two years, which caused US stock markets to close down for 8 consecutive days, with the Dow Jones Industrial Average slumping 2.2% and losing 12,000 points. As a result, LME copper prices slipped from highs, with prices finally ending at USD 9,653/mt, down USD 32/mt, and trading sentiment weakened.
During Wednesday's Asian trading hours, as copper prices on the Comex tended to fall in the morning session and the US dollar index will likely move up further, LME copper prices will be pressured to test USD 9,600/mt, with prices expected between USD 9,580-9,670/mt. In domestic market, domestic stock markets will make slight corrections today after experiencing declines on the previous trading day. SHFE copper prices will open down at around RMB 72,000/mt, and follow LME copper prices to experience a round of declines, but will rebound slightly after reaching lows, and SHFE 1110 copper contract prices will move in the RMB 71,200-72,100/mt range.