SHANGHAI, Jul. 25 (SMM) – With regard to copper price trends for the immediate future, the latest SMM survey of Chinese copper plate, sheet, strip, and foil producers revealed the following insights:
Based on the survey, 54% of producers expect SHFE copper prices to fluctuate narrowly around RMB 56,000/mt for the near term, pointing to earlier declines as consolidations at the lows. They said that, on one hand, the copper plate, sheet, strip, and foil industry now is entering a traditionally low season, while the NBS announced China's GDP growth for 2Q fell below 8% for the first time, an indication sluggishness in China's economy has yet to be curtailed effectively. On the other hand, although the Fed is unlikely to introduce QE3 over the near term, Fed Chairman Bernanke's statements when giving his semiannual monetary policy report to the US Congress have provided some stable information for markets. Besides, downstream producers have relatively high buying interest at around RMB 54,000/mt and help underpin copper prices. As such, these producers hold the view copper prices will fluctuate at current values in the near term.
14% see copper prices falling, which is due partly to the fact improvement in China's real estate market remains to be seen, despite a pick-up in June's home prices. Chinese Premier Wen Jiabao also warned that China's economy has yet to return to stable growth. An effective solution to the European debt crisis is still unavailable, weighing on slowing global economy. This has raised market worries over copper consumption growth amid slowing economy, so copper prices will be pressured down.
9% are positive towards the outlook, as they believe the US dollar index has gradually fallen on pressure after surging to 83.829, and will help boost copper prices. Furthermore, in the face of economic slide, China's central bank has lowered the interest rate twice, so liquidity has eased some. Markets are still optimistic the Chinese government will introduce more stimulus measures in the future, which will drive copper prices up.
23% of these producers cannot predict future copper price movements.