SHANGHAI, Jul. 4 (SMM) – With regard to copper price trends for the near future, the latest SMM survey of 21 major domestic wire and cable producers yielded the following insights:
Based on the survey, 62% of wire and cable producers are pessimistic over the outlook, believing SHFE copper may slide to RMB 52,000/mt. A continuously slow in China's economy means copper demand prospects are discouraging. Besides, the European debt crisis is spreading as Cyprus' government has become the fifth euro zone country to formally apply for EU bailout funds. While the US economy faces difficulties to recover, China's PMI was reported to remain below the 50 mark, another sign that demand for copper, which is widely used in the manufacturing sector, is sluggish. Weak domestic and foreign markets will greatly hurt investor confidence and push investors to buy the US dollar for a safe-haven. In this context, copper prices will come under pressure and move lower for the foreseeable future.
24% of these producers expect copper prices to stay mired at current values. They hold the view although volatility in recent copper prices increased, but spot copper prices in China are still hovering around RMB 55,000/mt, without a unilateral price trend. As such, copper prices will likely continue to lurch near current levels before any major changes in consumption and the macroeconomic front.
14% of wire and cable producers SMM surveyed are unclear about dictions of future copper prices.