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SMM Morning Review - 2012/3/14 Copper Market
Mar 14,2012 09:45CST
smm insight
Source:SMM
LME copper prices will move between USD 8,500-8,620/mt during Wednesday's Asian trading session, while SHFE 1206 copper contract prices will fluctuate in the RMB 60,600-61,600/mt range.

SHANGHAI, Mar. 14 (SMM) –The US Federal Reserve (Fed) Tuesday acknowledged strong strength in the US economy for the first time recently, describing the economy as "expanding moderately". Nevertheless, the Fed remained unchanged from its January statements, and failed to offer any clue of further monetary easing, reiterating its anticipation that benchmark interest rate would remain near zero until at least late 2014. In response, LME copper prices fluctuated strongly in early US and European trading session, but met resistance near USD 8,550/mt owing to an increasing US dollar. Later, Fitch raised Greece's credit rating to "B-" from "selective default", lifting European stock markets. The Fed released the result of bank stress test, better than it was in 2009, and cleared the way for major banks to raise dividends and repurchase shares. The US later announced its retail sales rose to their highest in five months in February, causing US equity markets to close with strong gains. The Dow Jones closed above 13,000, while the Nasdaq Composite Index ended above 3,000 for the first time since 2000, an 11-year high. LME copper prices thus broke technical resistance at USD 8,600/mt at the tail of trading and touched a high of USD 8,608/mt, before finally settling at USD 8,552/mt, a considerable surge of more than USD 100/mt and standing above all moving averages.

Low-end LME copper prices will rise significantly due to positive news Tuesday. But the US dollar tends to move higher after breaking resistance at 80, which will cap upside LME copper prices. As such, LME copper prices will move between USD 8,500-8,620/mt during Wednesday's Asian trading session. Chinese stock markets will meet resistance when moving higher. SHFE copper prices will follow LME copper prices to trend higher, and challenge pressures at RMB 61,500/mt, while SHFE 1206 copper contract prices will fluctuate in the RMB 60,600-61,600/mt range. Spot copper offers are estimated between discounts of negative RMB 50/mt and premiums of positive RMB 30/mt. 
 

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