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SMM Daily Review - 2011/9/21 Copper Market
Sep 22,2011 09:16CST
price review forecast
SHFE 1112 copper contract prices, the most active one, opened down RMB 370/mt at RMB 62,480/mt on Wednesday.

SHANGHAI, Sept. 22 (SMM) –SHFE 1112 copper contract prices, the most active one, opened down RMB 370/mt at RMB 62,480/mt on Wednesday. SHFE three-month copper contract prices moved lower after the opening, since short investors continued to increase position holdings, with prices dropping to a new yearly low of RMB 61,830/mt. In the afternoon session, People’s Bank of China (PBOC) said the country's newly increased RMB funds stemming from foreign exchanges totaled RMB 376.9 billion in August, still higher than July’s RMB 219.6 billion, and markets believed the PBOC would probably introduce new monetary policies to boost domestic demand. As a result, capitals rushed into Chinese stock markets, which then surged. SHFE three-month copper contract prices were lifted by rising Chinese stock markets, and reversed earlier losses. However, since short investors again imposed pressures at above RMB 63,000/mt, SHFE three-month copper contract prices couldn’t move up further after touching RMB 63,000/mt, and basically fluctuated around RMB 62,950/mt in the afternoon session. Finally, SHFE 1112 copper contract prices ended the day at RMB 62,940/mt, up RMB 90/mt or a gain of 0.14%. Positions for SHFE 1112 copper contracts were up 5,602 lots, and trading volumes were up 127,000 lots.

In the spot market, SHFE copper prices moved higher after a low open, while low sentiment in the spot market eased. In this context, cargo-holders held price offers firm in the morning business, with premiums reported between positive RMB 20-120/mt. However, SHFE current-month copper contract prices increased by nearly RMB 800/mt near the midday, increasing cargo-holders’ willingness in moving goods but dampening downstream producers’ buying interest. As a result, spot copper premiums fell rapidly, and standard-quality copper was even traded at discounts. Traded prices for standard-quality copper were between RMB 62,600-62,900/mt in the morning business, and RMB 62,700-63,100/mt for high-quality copper. Market surpluses were still more pronounced, and transactions were more cautious before rising copper prices were confirmed. SHFE copper prices fluctuated at high levels in the afternoon session, and mentality of buyers and sellers changed due to stable copper prices, with cargo-holders holding goods and downstream producers actively making purchases. Traded prices already surged between RMB 63,150-63,450/mt.  

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