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SMM Morning Review - 2011/11/1 Copper Market
Nov 1,2011 09:40CST
price review forecast
Source:SMM
LME copper prices are expected to move between USD 7,980 -8,200/mt during today's Asian trading hours, while SHFE 1201 copper contract prices will fluctuate in the RMB 58,400-60,000/mt range.

SHANGHAI, Nov. 1 (SMM) –As a major victim of the European debt crisis, futures broker MF Global Holdings Ltd. filed for bankruptcy protection on Monday after a tentative deal with a buyer fell apart, re-triggering market fears over the potential economic problems in European countries and adding to market fluctuations. On the one hand, investors were awaiting details of the European debt deal reached last week, while there were fresh worries about future copper demand in the Western world. On the other hand, since the preliminary HSBC China Manufacturing Purchasing Mangers Index (PMI) was positive and China would announce other related economic data the following day, and since LME copper prices moved around USD 8,000/mt, short investors didn't dare to make aggressive sell-offs and chose to be cautious. US equity markets fell by 3% amid bearish sentiment and capital shortages, and LME copper prices mostly fluctuated between USD 7,900-8,000/mt in Monday's trading session, with sluggish trading volumes. At the tail of trading, the US economic reports announced were mixed, and in particular, the Chicago Manufacturing Index for October hit the lowest since May, greatly dampening LME copper prices, which finally closed at USD 8,007/mt. However, it was worth noticing that although the US dollar surged significantly Monday due to interference of Japanese and South Korean central banks, LME copper prices didn't experience big declines, showing more resilience in LME copper price against the backdrop of severe struggle between long and short investors.

Although the moves of MF Global Holdings Ltd. overnight clouded the markets somehow, market focus will be on the release of China's two important economic data today. LME copper prices will later be pushed up and have the possibility to reach highs if China's economic figures turn to be positive. Hence, LME copper prices are expected to move between USD 7,980 -8,200/mt during today's Asian trading hours. Chinese stock markets will open lower due to impacts from US equity markets, but will not move lower further. SHFE copper prices will closely follow LME copper prices, while SHFE 1201 copper contract prices will fluctuate in the RMB 58,400-60,000/mt range.

 

copper morning review

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