SHANGHAI, Oct. 15 (SMM) – Last Friday, the IMF issued reports showing that economic growth in Asia has slowed due largely to unfavorable external factors as recovery in developed countries suffered difficulties. The IMF said economic rising momentum in China and India weakened and hindered the region's economic growth, and expected Asian economic growth will fall slightly to 5.4% in 2012 from April's estimate of 6%, and down to 5.9% in 2013 from earlier prediction of 6.6%. The report also pointed out that for the Asian region, there is low possibility of an economic hard landing in China, but the impact will have a bigger risk. Some analysts believed China's GDP growth to be released this week will slow for 7 consecutive quarters to the lowest level since the serious stage of global financial crisis. Coupled with the approach of the annual LME week, traders, producers, and consumers will likely sign long-term contracts for next year this week, causing traders tol withdraw from markets. As investors were worried over China's copper demand, US equity markets swung between gains and losses. As a result, LME copper prices plunged unilaterally in the US and European trading session and closed at an intraday low of USD 8,118/mt, down as high as 1.3%, and also posting the biggest weekly decline in two months.
China will announce the latest CPI and PPI data Monday, and markets anticipate the CPI will return to 1%, but this means the PPI will continue to dip, which will exert pressures to the financial markets. LME copper prices thus will fluctuate weakly between USD 8,020-8,120/mt during Monday's Asian trading session. The Shanghai Composite Index will continue struggling at around the 60-day moving average. SHFE copper prices will remain weak after starting down, and SHFE 1301 copper contract will hover in the RMB 57,800-58,500/mt range. In spot copper markets, the price gap between SHFE 1210 and 1211 copper contract will narrow further as Monday is the last trading day for SHFE 1210 copper contract. Spot copper offers are estimated between discounts of negative RMB 0/mt and premiums of positive RMB 100/mt.