SHANGHAI, Jun. 27 (SMM) – With regard to copper price trends for the foreseeable future, the latest SMM survey of 21 Chinese copper smelters yielded the following insights:
Based on the survey, 47% of smelters see copper prices falling in the near future, pointing to no fundamental changes in overall market environment and mode in China's economic growth. Besides, the Chinese housing market is unlikely to relax significantly, which is not only to affect copper demand from the construction sector but also to depress consumption for household appliances as well as other terminal products. Although China's central bank has recently lowered the interest rates for the first time in more than three and a half years, the Chinese economy is unlikely to experience a V shape reverse seen in 2008 and 2009. Furthermore, although the pro-austerity party in Greece has won the vote and three parties have established the coalition government, the country is still facing an uneven road in the future. Spain's bond yields have increased by over 7%, the highest since 1999. All indicates uncertainty in the European debt crisis. In this context, these pessimists believe copper prices will fall further in the immediate future.
29% of the surveyed copper smelters expect that copper prices will keep fluctuating. On one hand, mild recovery in the US economy and the conservative party's success in Greek election have undoubtedly provided support for copper prices, while investors still hold hope the Fed will introduce quantitative easing measures. On the other hand, China's copper consumption remains slack. As such, these copper smelters anticipate copper prices to keep lurching.
19% of copper smelters are optimistic over future copper prices, as they believe copper price declines in May were too rapid and negative news was exaggerated. Furthermore, SHFE copper stocks were recently reported to fall sharply. Coupled with gradually rising technical indicators, these smelters hold the view that copper prices will move higher in the near future.
The remaining 5% copper smelters SMM contacted cannot predict future copper prices.