SHANGHAI, Mar. 13 (SMM) –With regard to future copper price trends, the latest SMM survey of 21 major domestic copper tube/pipe producers yielded the following insights:
29% of producers contacted by SMM believe there is still rising momentum for copper prices. The news front in international markets is relatively calm for the time being, and the European debt problems are unlikely to have a significant impact on copper markets. LME copper inventories have been falling, while the volume of cancelled warrants stands high, with bullish sentiment growing. Besides, spot copper in London recently climbed to premiums of positive RMB 30/mt, an evidence of strong resilience in copper prices.
28% of the copper tube/pipe producers SMM surveyed expect SHFE copper prices to fluctuate further between RMB 59,000-61,000/mt for the near future. Despite high bullish sentiment on the LME market, China's domestic copper consumption remains sluggish, with investors having little intention of catching up with rising copper prices. In this context, these producers believe copper prices will continue to fluctuate at current values.
14% of producers are pessimistic about the outlook. Chinese Premier Wen Jiabao cut the country's 2012 economic growth target to 7.5% when delivering a government work, the first time below 8% in the past eight years. This means that China's investment growth will definitely slow. Furthermore, the much-expected peak demand period hasn't materialized now in March, hurting market confidence in Chinese copper demand. SHFE copper prices therefore will slide to RMB 56,000/mt for the near future.
The remaining 29% copper tube/pipe producers are unsure about future copper prices.