Metals News
SMM Morning Review - 2012/1/4 Copper Market
smm insight

SHANGHAI, Jan. 4 (SMM) –The China Federation of Logistics & Purchasing (CFLP) announced Sunday that China's purchasing managers' index (PMI) rose to 50.3% in December following drops for two consecutive months, higher than Reuter's median forecast of 49.1%, and up 1.3% from the November level, suggesting a slight expansion in China's factory sector. As a result, LME copper prices moved higher after a high open on Tuesday. In the evening, the US announced its manufacturing sector grew at the fastest pace in December since June, an indication of good economic momentum for 2012, which heightened market sentiment and helped US and European stock markets rise by 1.5%. Consequently, LME copper prices climbed to a recent daily high and finally ended at USD 7,769/mt, a gain of nearly more than 3%. However, investors didn't increase purchases amid increasing prices due to concerns over the lingering European debt crisis, commonly believing copper prices would remain relatively weak over the mid-and-long term after moving at high levels.

Asian markets today will continue to absorb last night's positive data, but will lack buying support, while the US dollar will make adjustments following significant declines. Therefore, LME copper prices will move between USD 7,700 -7,800/mt during today's Asian trading hours, with resistance expected at USD 7,800/mt. Chinese stock markets will move higher and try to stand stably at 2,200 points owing to rising US stock markets. SHFE copper prices will open higher on the first trading day of 2012 with support at RMB 56,000/mt, and SHFE 1203 copper contract prices will fluctuate in the RMB 56,500 -57,300/mt band. Spot copper discounts are estimated between negative RMB 400-250/mt versus SHFE 1201 copper contracts. 

copper morning review
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