SHANGHAI, Sept. 13 (SMM) –Worries about the European debt crisis Monday gathered pace after the resignation of Juergen Stark because of his opposition to the bank's controversial bond-buying program and German Chancellor Angela Merkel's speculation over default of European debts, especially a Greek default. Meanwhile, rumors of a possible downgrade of credit ratings of French banks also became the market focus, sending the euro down to a nearly two-month low. The US dollar index continued to climb to 77.784 for a safe haven. Capitals on Asian stock markets all fled, with the Hang Seng Index plummeting. Besides, the Chinese Mid-Autumn Festival holiday also kept transactions for LME copper low, dragging down LME copper prices after the opening. Later, Chile's Codelco said some of its European and US clients asked to cancel orders due to fears there will be less demand amid global financial turmoil, causing copper prices on the European and US markets to fall further during earlier trading hours and touch a nearly one-month low USD 8,620/mt. At the tail of trading, Italy and other Euro-zone countries asked China for help to support the euro by buying their bonds, providing hope for investors and helping ease the escalating pace of European debt issue. Meanwhile, the European Central Bank (ECB) also said to largely buy the Euro-zone bonds, easing the euro's declining pace and leading the US dollar to fall from highs. The US equity markets closed slightly higher due to inflows of some speculative funds. In response, LME copper prices narrowed the losses, with prices finally closing at USD 8,766/mt.
LME copper prices opened above USD 8,800/mt today, and China's already announced unwrought copper data will also boost LME copper prices. However, the possible downgrade of three French banks' credit ratings from Moody's and fears over the European debt problems will keep the euro weak, but the ECB's moves will limit its downside room. Narrow fluctuations of the US dollar index at high levels will dampen the high-end LME copper prices, and together with signs of moving lower of Comex copper prices in the morning session, LME copper prices are expected to move between USD 8,750-8,880/mt during Tuesday's Asian trading hours. Chinese stock markets will hover near 2,500 points. SHFE copper prices will meet buying support after opening down, while SHFE 1111 copper contract prices will fluctuate in the RMB 65,500-66,600/mt band.