SMM Copper Price Forecast (Dec. 5-9)

SHANGHAI, Dec. 5 (SMM) –SHFE copper prices fluctuated around RMB 55,000/mt early last week. On Thursday, prices opened at their daily upper trade limit of RMB 58,180/mt before falling back, but still posted a weekly gain of 8.15%. Positions for SHFE copper were down significantly, falling by 70,000 lots. SHFE copper prices also touched the stop-loss limit of short investors, while long investors left the market after profit-taking. Gains in SHFE copper prices were less than those for LME copper since SHFE came under heavy pressure at the 60-day moving average, despite upward technical indicators.  

SMM believes SHFE copper prices will rise to RMB 60,000/mt in the coming week.

In spot markets, month-end cash flow pressures and ample copper supply caused copper premiums to fall sharply last week, with imported copper traded at slight discounts. Downstream producers chose to stay out of the market following recent copper price surges, but some speculators chose to enter the market with prices at slight premiums. Overall market activity was light.

The amount of imported copper arriving at Chinese ports will likely increase during December, so cargo-holders will continue to actively move goods, but this will push down spot copper premiums and entice traders to make purchases. In this context, trading sentiment in spot markets will likely improve in the coming week.