SHANGHAI, Aug. 8 (SMM) –Last week, SHFE copper prices also fell back, tracking declines in LME copper prices. Weak domestic stock markets kept market players on the sideline and sent SHFE copper prices lower to RMB 70,000/mt, down from a weekly high of RMB 73,600/mt, a drop of nearly 4%.
In the coming week, SHFE copper prices will continue to fall after breaking through RMB 70,000/mt. Chinese stock markets will not likely regain rising momentum and will likely test the support at 2,600 points given the lack of speculative funds. With expectations growing for more interest rate hikes in China, markets will remain cautious and SHFE copper prices will lose the 60-day moving average, and then fall further to RMB 68,000/mt.
In spot market, as SHFE copper prices moved lower, copper discounts during last week fell from negative RMB 450/mt, and offers for high-quality copper had signs to turn into premiums from discounts. Trader’s speculative activities reduced given falling copper discounts, while downstream producers increased purchases when copper prices fell back, improving market transactions.
In spot markets, copper offers next week will change from discounts into premiums due to the approach of delivery dates and from significant declines in SHFE copper prices. Together with hedge trading, more goods will come into the market and increase supply. Downstream producers will make purchases at low prices, which will also increase market transactions.