SHANGHAI, Mar. 21 (SMM) –During Tuesday's US and European trading session, commodity markets were negatively affected by weak sentiment in the Asian trading session, while the US dollar rallied in the early trading session due to growing risk aversion. In response, crude oil prices dived by 2.3%, and weighed LME copper prices down. Later, the US announced two economic figures, showing that permits for future construction climbed to their highest since October 2008, but that housing starts fell unexpectedly in February. This meant the US housing market need more time to recover, causing US equity markets to close down. LME copper prices thus slid below USD 8,400/mt, down as low as USD 8,383/mt. However, as the US dollar surrendered some of the gains at the tail of trading after suffering technical resistance, LME copper prices rebounded above the USD 8,400/mt mark before finally settling at USD 8,442/mt, extending fluctuating trends.
LME copper prices will make corrections following considerable losses on the previous day. The US dollar will meet resistance over the near term, providing some support for LME copper. Besides, Comex copper prices tended to rally from the lows. As such, SMM anticipates LME copper prices will move between USD 8,410-8,540/mt during today's Asian trading session. Chinese stock price trends are optimistic, boosted by the move of allowing pension funds in Guangdong to enter stock markets. SHFE copper prices will likely gain some buying support below RMB 60,000/mt after a low open, and then stabilize, while SHFE 1206 copper contract prices will fluctuate in the RMB 59,800-60,800/mt range. Spot copper discounts are estimated between negative RMB 300-200/mt versus SHFE 1204 copper contracts.