SHANGHAI, Jan. 9 (SMM) –Last week, as Chinese stock markets continued to fall toward 2011 lows, SHFE copper prices also surrendered most of previous gains, falling from RMB 56,680/mt, to RMB 55,500/mt. Downward momentum eased, however, after short-term long investors began buying.
SHFE copper prices will fluctuate between RMB 55,000-56,500/mt in the coming week.
There were only three trading days last week in Chinese markets due to the holiday factor. As cargo-holders were holding goods at low prices due to eased cash flow pressures, and as downstream producers were more willing to buy at low prices, helping spot copper discounts narrow and market transactions improve. Spot copper discounts already turned to premiums last Friday.
In China's domestic spot markets, copper prices should move higher in the coming week since supply will fall as cargo-holders close for the Chinese New Year holiday, but with downstream producers still needing to replenish stocks before the holiday. Copper discounts will shrink toward RMB 0/mt.