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SMM Morning Review - 2012/5/28 Copper Market
May 28,2012 09:38CST
smm insight
Source:SMM
LME copper will move between USD 7,600-7,680/mt during Monday's Asian trading session, and SHFE 1209 copper contract should hover in the RMB 54,800-55,500/mt band.

SHANGHAI, May 28 (SMM) – The macroeconomic front was relatively quiet last Friday. The US announced in the evening that the final Michigan Consumer Sentiment Index stood at 79.3 in May, higher than both the previous data and market anticipation. Nevertheless, an opinion poll suggested that the pro-austerity leftist party SYRIZA in Greece still took a leading position. Besides, in Asian trading session, the euro hit a nearly two-year low and registered the biggest loss in five months. Markets thus were further overshadowed by worries over the Greek issue, propelling US and European investors to mainly make profit-taking for risk aversion. As a result, LME copper was restricted and moved below the 10-day moving average of USD 7,680/mt, surrendering some of the gains reported in Asian trading session. Finally, LME copper ended at USD 7,627/mt, an increase of USD 62/mt, but both trading volumes and positions fell. Furthermore, the proportion of canceled warrants to total LME copper stocks slid to around 11%, but declines in LME copper stocks eased some.

The euro's movements will be capped in the face of unclear prospects for the euro zone area, and since Standard & Poor's again cut 5 Spanish banks last Friday evening, while the US dollar will stand at 82. As such, LME copper will likely fluctuate in its previous range, with prices expected between USD 7,600-7,680/mt during Monday's Asian trading session. Chinese stock markets will move feebly. SHFE copper will lurch in a narrow band after starting flat, and SHFE 1209 copper contract should hover in the RMB 54,800-55,500/mt band. Spot copper premiums are estimated between positive RMB 150-250/mt versus SHFE 1206 copper contract.  

 

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