SHANGHAI, Apr. 18 (SMM)–Favorable news piled up on Tuesday. Spanish public bond auction was successful, and German's economic data was reported to be positive, boosting investor confidence about the euro zone's recovery. In response, the euro rallied from early lows and helped push up commodity markets. Besides, the International Monetary Fund (IMF) raised global economic growth prospects for 2012 and 2013. Meanwhile, the US announced home building permits surged to the highest level in three and a half years in March, which eased market worries over global economic growth temporarily. Major US banks reported higher-than-expected performance for 1Q, implying that the US financial environment has improved, which led US equity markets to advance significantly with the Dow Jones Industrial Average climbing by 1.5%. In addition, the news that Rio Tinto's copper output fell unexpectedly reignited market concerns over spot copper supply problems. LME copper prices thus trended directly higher towards the 5-day moving average of USD 8,078/mt before finally ending at USD 8,062/mt. Nevertheless, there was still large profit-taking at higher price levels, and LME copper prices still need to test USD 8,000/mt repeatedly.
LME copper prices opened around the 5-day moving average this morning and have yet to break technical resistance. Market investors keep cautious ahead of sales of Spanish 10-year and 2-year bonds. As such, SMM believes LME copper prices will move between USD 7,980-8,080/mt during Wednesday's Asian trading session. The Shanghai Composite Index will test support at the 5-day moving average. SHFE copper prices are expected to extend rebounds after a high open, while SHFE 1207 copper contract prices will fluctuate in the RMB 57,000-58,000/mt range. Spot copper offers are estimated between discounts of negative RMB 50/mt and premiums of positive RMB 30/mt versus SHFE 1205 copper contracts.