SHANGHAI, Feb. 27 (SMM) –China's Shanghai Composite Index surged to 2,400 points and SHFE copper prices were boosted following news of a cut in banks' RRR by China's Central Bank. However, a large number of short investors entered the market at high prices, dampening SHFE copper prices, which met resistance at RMB 60,810/mt. Due to a lack of clear technical indicators, SHFE copper prices should continue to test RMB 60,000/mt.
In spot markets last week, copper supply was stable and traders using copper as a financing vehicle were actively moving goods. Spot copper discounts expanded to between RMB 400-500/mt as a consequence. Speculators took advantage of increasing copper discounts to buy high-quality copper. However, domestic copper smelters showed reluctance in selling owing to large discounts. Downstream buying interest heightened early last week at prices below RMB 59,000/mt, but then low-end copper price rallied gradually, depressing market sentiment and turning markets quiet.
SMM expects in the coming week LME copper prices to fluctuate between USD 8,300-8,500/mt and SHFE copper prices between RMB 59,000-61,000/mt.