SHANGHAI, Mar. 26 (SMM) –Chinese stock markets fell 2% due to poor investor confidence and SHFE copper prices slid rapidly to RMB 59,560/mt after hitting a high of RMB 60,800/mt, and only finding support at the 60-day moving average. With selling pressure growing, SHFE copper prices fell by 1.8% for the week.
As copper futures prices struggled early last week, market transactions stagnated at the RMB 59,500/mt level in spot markets. Cargo-holders held divergent views, however, with traders holding hedged copper selling aggressively, leading to sufficient market supply, but copper smelters were holding goods at lower prices. Downstream producers increased buying at the lows, helping market transactions rise after initially falling.
SHFE copper prices will probably slide to the 60-day moving average in the coming week, but will hold at RMB 59,500/mt if SHFE 1207 copper becomes the most actively-traded contract. As March ends, cash generation will allow spot copper supply sufficient, and market transactions at lower price levels will increase appropriately.