SHANGHAI, Dec. 12 (SMM) –As Chinese stock markets closed down by more than 1% last week, SHFE copper prices fell more than LME copper prices as well. Trading volumes were down by 1.5 million mt, with both long and short investors mainly making intraday transactions. SHFE copper prices fluctuated around RMB 58,000/mt and caused the SHFE/LME copper price ratio to fall further. SHFE copper prices lost upward momentum due to resistance at daily moving averages, but still found support at RMB 56,000/mt.
In spot markets, copper supply increased significantly due to a rise in imported copper arriving at Chinese ports, leading spot copper to be traded at discounts across the board. Speculators chose opportunities to make purchases, but downstream producers stayed out of the market, with no intentions in building stocks due to sluggish orders and capital pressures at the year's end.
SHFE copper prices will fluctuate in the RMB 57,000-59,000/mt range, with resistance above RMB 60,000/mt. Due to market surpluses, spot copper premiums will likely vanish in the coming week even if the SHFE 1202 copper contracts are delivered on December 15th.