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SMM Morning Review - 2012/5/29 Copper Market
May 29,2012 09:28CST
smm insight
LME copper will move between USD 7,650-7,750/mt during Tuesday's Asian trading session, and SHFE 1209 copper contract should hover in the RMB 55,500-56,200/mt range.

SHANGHAI, May 29 (SMM) – As the US financial market was closed for a holiday on Monday, market activity for LME copper was quiet. On the macroeconomic front, there was news that the Hellenic Financial Stability Fund disbursed EUR 18 billion to Greece's four largest banks, which helped Greek stocks surge by 6.9%. However, Spain was reported to possibly consider issuing more public bonds to recapitalize its Bankia so that the latter could get cash from the ECB. Meanwhile, data suggested that the differential between Spanish and German government bonds interest rate hit a fresh euro-era high, sending Spanish stocks markets back to levels equal to those nine years ago, down significantly by 2.2%. Investors were thus wary of operation, and LME copper reversed Asian trading session's strong gains in the evening and came under noticeable resistance, with prices finally ending at USD 7,676/mt, a gain of USD 50/mt. In other news, the proportion of canceled warrants to total LME copper stocks slid further, down to 10.74% Monday, meaning weakening support for copper prices from the fundamentals side.

The US dollar recouped the 82 mark and continued to start higher this morning, weighing on crude oil and Comex copper price movements. Hence, LME copper will fluctuate in the previous range, with prices expected between USD 7,650-7,750/mt during Tuesday's Asian trading session. Chinese stock markets will post relatively strong performance. SHFE copper will suffer great resistance at RMB 56,000/mt following the opening and test support around RMB 55,500/mt, but prices are likely to edge down since the previous day's settlement price was comparatively high. SHFE 1209 copper contract should hover in the RMB 55,500-56,200/mt range. Spot copper premiums are estimated between positive RMB 120-200/mt versus SHFE 1206 copper contract.    


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