SHANGHAI, Oct. 27 (SMM) -- Boosted by news that EU summit reached a framework agreement for solving the European debt crisis and that Chinese government may fine-tune its macroeconomic regulations, Shanghai metal prices continued to rebound in recently days. SHFE three-month copper contract prices rose after opening, and surged to the 30-day moving average.
Good news has been continuously coming out during recent days. Firstly on Monday the HSBC's China initial PMI rebounded to above 50 mark, indicating that China’s economic growth is expected to stabilize during the fourth quarter. Meanwhile the NDRC said China’s CPI has already hit the highest level this year and can be controlled below 5% during following two months. On Wednesday October 26th, China’s Premier Wen Jiabao said governments would properly control the intensity, pace and focus of its macroeconomic regulation and would fine-tune its macroeconomic regulations at the proper time, thereby maintaining reasonable growth of total credit supply, optimizing financing structures and enhancing financial service qualities. Market players expect that the Central Government will dial back the reserve requirement ratio before the end of 2011 and cut interest rates during the second quarter in 2012. This significantly boosted investors’ confidence for metals. Further more, the EU Summit on Wednesday provided a framework agreement for solving the European debt crisis and the Germany approved the EFSF expansion during the same day. As a result, Shanghai metals saw a continuous rebound, with traded volumes slightly increasing.
Shanghai metal prices should continue to rise in the short term due to a series of positive news. But inventors are advised to be cautious as prices have been rising for days.