Nearly 60% producers Believe Copper Prices to Fluctuate

SHANGHAI, Sept. 13 (SMM) –With regard to recent copper prices, SMM conducted a survey of 21 major domestic copper plate, sheet, strip and foil producers, and about 60% producers said copper prices will mainly fluctuate for the foreseeable future.

Around 58% producers in the survey stated copper prices will fluctuate around RMB 67,000/mt. Copper price fluctuations are currently impacted by the news side, which is temporary. The world economy hasn't been significantly affected by substantial policy measures, so temporary negative or positive factors will not likely cause copper prices to rise or fall significantly. Therefore, copper prices will fluctuate at current levels for some time.    

Around 21% producers were pessimistic towards recent copper prices. They held the view that global economic growth has slowed down and fears over another world recession persists. In this context, copper demand in Europe and the US will not be optimistic, and Chinese demand will not likely improve due to its export-oriented economic structure. Weak Chinese demand will sustain in the future even during the high demand period, so copper price increases in recent two days are merely price rebounds following the declines. Hence, the reverse of copper prices is unlikely due to a lack of necessary conditions.        

Approximately 5% surveyed producers held high expectations towards future copper prices, since they believed recent copper price trends will mainly depend on copper's fungible nature. Recently, the Obama administration announced to the US Congress a jobs stimulus plan requiring an expenditure of USD 447 billion, and Brazil, a new emerging economy, has changed its persistent tight monetary measures, stating to reduce the benchmark interest rate by 0.5% to 12%. In this context, the situation of issuing currencies remain unchanged, therefore, the chances of copper price increases are slimmer than copper price declines.

Another 16% producers couldn't predict future copper prices.