SMM Morning Review - 2012/2/16 Copper Market

SHANGHAI, Feb. 16 (SMM) –Euro zone finance ministers were considering delaying part or even all of the second bailout package for Greece, but still hoped to avert a default, weighing on markets again. The euro slipped from earlier highs as a consequence, down to a one-week low. Later, the US announced its industrial production index for January slid unexpectedly, down from the previous figure and market expectations as well, which led US equities to close with losses. Therefore, retreating gradually from high levels, LME copper prices finally returned back to near the previous session's settlement price level and closed at USD 8,385/mt.

The euro zone trends are unclear, and the US dollar shows resilience. Hence, SMM expects LME copper prices to fluctuate weakly between USD 8,350-8,450 during today's Asian trading session. Chinese stock prices will hold firm, which will provide slight support for SHFE copper prices and help SHFE 1205 copper contract prices move in the RMB 59,700-60,500/mt band. In spot markets, copper discounts are estimated between negative RMB 250-150/mt versus SHFE 1203 copper contracts, while traded prices will likely hold flat with the prior day levels.