SHANGHAI, Mar. 12 (SMM) –Chinese Premier Wen Jiabao cut China's economic growth target for 2012, causing Chinese stock markets to fall 2.3%. SHFE copper prices also fell from RMB 61,500/mt to RMB 59,000/mt, but aggressive purchasing at lower prices helped prices hold the RMB 59,000/mt mark. SHFE 1206 copper became the most actively-traded copper contract last week.
In spot markets last week, as copper prices fell sharply, hedged copper came into markets while spot copper discounts narrowed considerably, even turning into slight premiums. Traders only expressed buying interest at the lows, but downstream producers only entered markets below RMB 69,000/mt. Market surpluses were still prominent as cargo-holders sold aggressively.
Cargo-holders will quote prices firm, but copper consumption will remain sluggish. In this context, SMM believes that LME copper prices will move between USD 8,300-8,500/mt in the coming week and that SHFE copper prices will be between RMB 59,000-61,000/mt.