SHANGHAI, May 8 (SMM) – With regard to copper price trends for the near future, SMM's recent survey of 21 major domestic copper wire rod producers revealed the following insights:
33% of the surveyed copper wire rod producers believe copper prices will continue to fall. Despite long investor activity in London, copper prices will be finally largely affected by the fundamentals side. Domestic copper demand is weak, even during the traditional high demand period, and is likely to remain so if there are no large-scale positive government policies. Besides, Europe is heading for a sluggish economy for a prolonged period. Against the backdrop of slowing global economic growth, commodity markets are unlikely to extend earlier bullish movements. SHFE copper prices thus will probably fall to RMB 55,000/mt for the foreseeable future.
19% of the producers expect SHFE copper prices to rally to RMB 60,000/mt amid long investor activity. It is reported that domestic copper smelters and trading firms have stepped up efforts to deliver copper to the LME. Nevertheless, as capital costs overseas are low, and as domestic copper resources are mostly exported from foreign countries, domestic copper markets will tighten if large quantities of copper are shifted to the LME. Hence, these producers anticipate copper prices are unlikely to slide.
10% of producers hold the view SHFE copper prices will continue to lurch around RMB 58,000/mt owing to severe struggle between long and short investors.
38% of copper wire rod producers cannot predict where future copper prices are headed.