SHANGHAI, Mar. 6 (SMM) –The US and European markets Monday continued to absorb the news that Chinese Premier Wen Jiabao cut China's GDP growth to an eight-year low when delivering a government work, stoking market worries over demand from the world's largest importer for the industrial metal. Meanwhile, the euro zone Composite Purchasing Managers' Index (PMI) was announced to slip back below the 50 mark in February, and some surveys revealed that the slide was caused by sharp drops in Spain and Italy, which would probably lead the region's recession to worsen further. European stock markets fell as a result. The US later announced mild economic data, with February's growth in the service sector rising to a one-year high. Nevertheless, US equity markets still closed with losses since risk aversion was increasing. LME copper prices moved lower all the way as some short investors entered the market, down as low as USD 8,430/mt and finally ending at USD 8,485/mt, a decline of more than 1.5%.
Monday's negative news will continue to weight on copper markets. LME copper prices will continue to test support at the 20-day moving average at the low-end during Tuesday's Asian trading session, with prices expected between USD 8,470-8,550/mt. Chinese stock markets swill open down. SHFE copper prices will retreated below the RMB 61,000/mt mark following a lower open, while SHFE 1206 copper contract prices will fluctuate in the RMB 60,400-61,000/mt range. Spot copper discounts are estimated between negative RMB 200-100/mt versus SHFE 1203 copper contract.