SHANGHAI, Dec. 6 (SMM) –France and Germany Monday decided to implement stricter budget rules to the European Union (EU), saying the EU treaty needs to be adjusted and should impose sanction to countries that are against the rule, spurring investor confidence. Besides, the US later announced mild economic data, which lifted US equity markets and caused LME copper prices to challenge a high near USD 8,000/mt in the session. However, as technical pressures and some sell-offs appeared, and since it was spread on the market that Standard & Poor's (S&P) gave warns to probably downgrade the AAA ratings for Germany, France and four other euro zone countries within 90 days, with negative outlooks placed on 15 euro zone countries, markets became less optimistic towards a resolution to the European debt crisis. As a result, LME copper prices dived with the euro, with prices closing at USD 7,935/mt, and failing to break out USD 8,000/mt for 4 consecutive days.
The credit ratings downgrade of euro zone countries by the S&P will keep investors cautious, and they are especially alert to European Central Bank's (ECB) interest rate discussion meeting to be held tomorrow. Hence, LME copper prices will move between USD 7,780 -7,950/mt during today's Asian trading hours. Chinese stock markets are unlikely to return to 2,400 points, weighing on SHFE copper prices. SHFE 1202 copper contract prices will fluctuate in the RMB 57,500 -58,800/mt range. Spot copper premiums are estimated between positive RMB 50-150/mt.