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SMM Morning Review - 2011/12/19 Copper Market
Dec 19,2011 09:45CST
smm insight
Source:SMM
LME copper prices are expected to continuously move at high levels between USD 7,300 -7,410/mt, while SHFE 1203 copper contract prices will move in the RMB 53,800 -54,800/mt.

SHANGHAI, Dec. 19 (SMM) –Italian government last Friday won a confidence vote on austerity measures in the lower house, while Germany was designed to avoid a referendum on the euro zone's permanent rescue fund, both of which lifted the euro and helped push up LME copper prices against the backdrop of a lack of positive news in the region recently. Besides, short investors generally opted to close positions before the Christmas holiday owing to expectations that copper prices would experience a round of rebounds at the year-end, helping LME copper prices move upward further. In addition, the US announced in the evening that its inflationary pressures weakened, greatly heightening market anticipation that the Federal Reserve (Fed) would introduce more stimulus measures to boost the economy. In response, LME copper prices soared to USD 7,400/mt again, with high-end prices touching USD 7,443/mt. However, markets were still jittery on Fitch's move of credit ratings downgrade for euro zone countries. Combined with technical pressures at the 5-day moving average, LME copper prices finally closed at USD 7,363/mt.

During Monday's Asian trading hours, markets are optimistic that European Union (EU) leaders will approve the EUR 150 billion by the International Monetary Fund (IMF), which will boost commodity markets. Therefore, LME copper prices are expected to continuously move at high levels between USD 7,300 -7,410/mt. Chinese stock markets will close higher due to promises from Central Huijin Investment Co., Ltd. SHFE copper prices will open higher and then keep fluctuating, while SHFE 1203 copper contract prices will move in the RMB 53,800 -54,800/mt band. Spot copper offers are estimated between discounts of negative RMB 50/mt and premiums of positive RMB 50/mt versus SHFE 1201 copper contracts.     

 

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