SMM Copper Price Forecast (Mar. 5-9)

SHANGHAI, Mar. 5 (SMM) –Markets expect liquidity to now improve following the cut in the bank Reserve Requirement Ratio (RRR) by China’s Central Bank, which boosted futures and stock markets and helped support SHFE copper above RMB 60,000/mt. Long and short investors, however, mainly conducted intraday operations, making price resistance more pronounced at RMB 61,000/mt but allowed SHFE copper prices to close up 1% for the week. SHFE copper prices still posted weaker gains than LME copper, so the SHFE/LME copper price ratio remained unfavorable.

In spot markets last week, hedged copper was locked as copper prices showed increasing resilience, while losses for copper importers expanded. Domestic copper smelters held goods due to growing discounts, causing supply to decline significantly and helping spot copper discounts fall. As markets turned more optimistic toward future copper prices, high-quality copper was extremely sought by traders, but downstream producers opted to stand on the sidelines at prices above RMB 60,000/mt. As a result, overall market activity was modest as month-end cash flow pressures dampened buying interest.

SMM expects in the coming week that LME and SHFE copper prices will challenge resistance levels of USD 8,700/mt and RMB 61,000/mt, respectively.