SHANGHAI, Dec. 27 (SMM) –With regard to recent copper price trends, SMM's latest survey of 20 major domestic copper tube/pipe producers yielded the following insights:
25% copper tube/pipe producers surveyed expect that LME copper prices will continue to fluctuate between USD 7,200-8,000/mt for the foreseeable future. On the one hand, both the Christmas holiday and New Year holiday will greatly depress market sentiment, while trading volumes dropped, both of which will not be able to help copper prices break out current fluctuating band. On the other hand, the impact on copper prices from macroeconomic news will weaken given concentrated holidays at the year's end. Hence, copper prices will keep fluctuating in the face of no big events.
25% producers surveyed hold the view there is still possibility LME copper prices will touch a low of USD 6,800/mt for the foreseeable future. Copper demand becomes weak at the year-end, and copper consumers will not be able to replenish copper stocks owing to tight cash flows, which will not help copper prices find strong support at USD 7,200/mt. Furthermore, global economic growth is slowing, and statistics of economic data will be announce later, which will dampen market confidence further.
15% producers see a bigger chance in rising copper prices since copper prices already consolidated. The European Central Bank (ECB) recently announced to provide three-year loans to European banks, issuing EUR 489 billion, well above market expectations of EUR 293 billion. In addition, Spain successfully sold its government bonds with lower yields than previous levels. In general, euro zone countries are taking efforts to solve their debt crisis, so there is a chance that LME copper prices will stand at USD 8,000/mt.
The remaining 35% copper tube/pipe producers can't predict future copper prices.