SHANGHAI, Feb. 14 (SMM) –Regarding future copper prices, SMM's latest survey of 20 major domestic copper tube/pipe producers yielded the following insights:
25% producers contacted by SMM expect copper prices to fluctuate at highs. US nonfarm payrolls increased by 243,000 in January, the highest since April 2011, while political leaders in Greece's coalition government reached a deal on harsh austerity measures to avoid a chaotic default, each of which will help improve intensified sentiment. However, domestic copper inventories have increased considerably, implying weak domestic consumption, so spot copper discounts will continue. Therefore, copper prices will extend fluctuations for the foreseeable future.
15% producers SMM surveyed are optimistic about future copper prices, due largely to positive expectations on domestic copper consumption. Despite pessimistic situation for the time being, copper consumption should become strong in March. Besides, copper inventories at both copper semis producers and copper end-users are low, boosting market speculation on future copper demand. Combined with recovering US economy and progress on Europe's debt, copper prices are likely to move higher.
20% producers hold the view copper prices will fall owing to sluggish orders and as many have yet to fully resume production. Many of these producers said euro zone debt woes will worsen again in March as the deadline for the region's debt nears, which will impose another round of pressures to copper prices.
The remaining 4% producers cannot predict future copper prices, saying they just begin to resume production and are not sure about China's future economic and industry policies.