SHANGHAI, Jun. 4 (SMM) – Copper futures prices on the SHFE also fell last week to a new low for the year of RMB 54,280/mt, down from RMB 56,300/mt. Rumors were spreading in domestic markets that the National Development and Reform Commission (NDRC) will step up the pace of new project approval, also heightening market speculation China may introduce another round of stimulus policies to boost the economy. In response, Chinese stock markets rose by nearly 2%, helping SHFE copper hold at RMB 54,000/mt, and helping the SHFE/LME copper price ratio advance to around 7.3. Nevertheless, both longs and shorts remained cautious as May ended and June began. Both positions and trading volumes contracted, with the latter decreasing by nearly 20% as of May 31st when compared to the previous week. 

In spot markets last week, cargo-holders became more willing to sell at the month's end. The improved SHFE/LME copper price ratio also helped boost copper imports, leaving spot copper supply sufficient as a result. Spot copper supply was diversified, and spot copper premiums held stable between RMB 150-220/mt. Speculators with enough cash chose to buy when copper premiums fell, while downstream producers with orders also bought at lows and only enough to maintain production. However, overall market transactions were still modest at the month's end. 

SMM expects SHFE copper prices will test RMB 54,000/mt before falling further in the coming week.