SHANGHAI, Jul. 9 (SMM) – China's PMI data reports from both the China Federation of Logistics & Purchasing (CFLP) and HSBC were below expectations and sent the Shanghai Composite Index down sharply by over 1% to below 2,200. The Shanghai Composite Index did not rebound following PBOC's cut in interest rates, while SHFE copper prices also weakened to between RMB 55,300-56,300/mt with noticeable resistance at RMB 56,000/mt, despite touching a high at the 60-day moving average during the week. Support for SHFE copper prices was also weakening based on technical indicators, although trading volumes were up during the first week of July.
In spot markets last week, imported copper cargo-holders insisted on firm prices and had little interest in selling goods for cash given the falling SHFE/LME copper price ratio. As a result, spot copper discounts narrowed gradually during the week, and high-quality copper discounts turned into slight premiums. Traded prices were above RMB 56,000/mt, but cargo-holders had different opinions on future price trends. Although traders were active buying spot copper and selling futures copper contracts, downstream producers continued to buy only as needed.
SMM anticipates SHFE copper prices hovering in the coming week between RMB 55,000 and 56,500/mt.