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SMM Morning Review - 2011/10/17 Copper Market
Oct 17,2011 09:44CST
price review forecast
Source:SMM
LME copper prices will move between USD 7,450 -7,580/mt during today's Asian trading hours, and SHFE 1112 copper contract prices will fluctuate in the RMB 55,500-56,500/mt band.

SHANGHAI, Oct. 17 (SMM) –The US and European markets continued to absorb China's continuous falling CPI data last Friday evening. Later, G20 Finance Ministers and Central Bank Governors met to discuss a convincing solution to the escalating European debt crisis, increasing market pessimism and lifting the Euro to 1.3893. In response, the US dollar index fell to 76.50. Meanwhile, the US government announced the better-than-expected retail sales data, which reassured investor confidence and helped US equity markets close more than nearly 2% higher. As a result, LME copper prices extended gains registered during Asian trading hours, and finally closed at USD 7,560/mt, up more than USD 200/mt, and rebounding more than 14% from the yearly low USD 6,700/mt two weeks earlier. Active quotation pricing helped LME copper prices take a lead in other commodities prices during the first week after China's National Day holiday. However, it was worth noticing that trade volumes for LME copper were still thin on last Friday evening, with no high sentiment of keeping up with the rising copper prices.

Major global economies at the G20 meeting already asked the Euro-zone countries to take decisive actions to solve the region's debt crisis within eight days, easing market worries. However, out of consideration that the Euro had experienced a wave of excessive increases last week, the Euro is likely to fluctuate at high levels during today, which will cause the US dollar to post weak performance and support LME copper prices. Besides, China's falling CPI data for September will support copper markets for one or two trading days. However, crude oil and Comex copper prices moved lower this morning, with great selling pressures at the highs. Therefore, LME copper prices will move between USD 7,450 -7,580/mt during today's Asian trading hours, with limited rebounding room. Chinese stock markets will open higher due to a higher close in US equity markets, and will extend slight gains due to support from capitals and government policies. The long and short investors will severely struggle between RMB 56,000/mt, and SHFE 1112 copper contract prices will fluctuate in the RMB 55,500-56,500/mt band.
 

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