SHANGHAI, Feb. 22 (SMM) –With regard to copper prices for the near future, SMM’s most recent survey of major domestic copper smelters yielded the following insights:
45% of copper smelters SMM surveyed are optimistic about the outlook. However, these smelters don’t expect copper prices can move higher further for the time being. They believe copper prices will likely surge in March at the earliest as the traditional high demand period for copper begins in this month, despite slowing Chinese economic growth. Besides, the US economic data continues to improve, suggesting a continuous recovery in the US economy, which is the biggest driving force for rising copper prices. In addition, the impact of debt default risks will wane after euro zone countries’ debts are due, creating opportunities for copper prices to increase.
40% copper smelters contacted by SMM expect future copper prices will fluctuate. Germany, Greece, and other European countries hold different views towards resolution to their debt issues, and negative news out of this region will cap copper prices. The Greek debt rescue deal can’t resolve debt problems fundamentally. Furthermore, despite market optimism towards domestic copper consumption, domestic copper inventories are rising at present, and the traditional high demand period hasn’t come yet, exerting some pressures to copper prices. Hence, these smelters believe copper prices will continue to fluctuate.
50% of these surveyed smelters are pessimistic about copper prices for the foreseeable future, due largely to growing domestic copper inventories, sluggish downstream consumption, and continuously spot copper discounts. Moreover, although Greece won the second bailout package, default risks prevail. Therefore, copper prices will probably fall in the near future.
The remaining 10% smelters say there is no clear guidance for copper price trends.