SHANGHAI, Aug. 16 (SMM) –Concerning recent copper price trends, SMM conducted a survey of 19 major domestic copper tube/pipe producers, showing as follows:
About 26% producers in the survey said copper prices will fluctuate recently. A copper price slump in early August triggered investor panic sentiment comparable to the 2008 financial crisis, but the two are different fundamentally. At present, neither the European debt crisis nor the US debt problem will give a dramatic attack on real economy as the 2008 financial crisis. Global economic growth is a slowdown rather than a crash, so copper prices will likely rebound after rapidly falling to such low levels. However, market confidence will not be able to quickly recover from the hit of uncertainties of major world economies. Therefore, copper prices will experience fluctuations, with prices expected to fluctuate in a wider range.
Around 26% producers are optimistic towards copper outlooks. Despite a slump, SHFE copper prices failed to fall below RMB 63,000/mt, suggesting strong support at this price mark. Moreover, the US Federal Reserve will maintain loose monetary policies, and the US dollar will move lower in the long term, which will propel copper prices. However, most producers said the upward process will not be easy, but the rising trend is certain.
Approximately 16% producers are pessimistic about future copper prices. They believed economy in Europe and the US remained weak, and that domestic CPI is high, both of which are negative factors for copper prices. From spot copper markets, copper premiums immediately turned into discounts after copper prices rebounded, suggesting that market demand is not brisk. Based on the macroeconomic front and fundamentals, copper prices tend to fall.
The remaining 32% producers said future copper prices are not clear yet, since macro situation is more complicated and downstream consumption is not brisk.