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SMM Copper Market Morning Review (2012-10-17)
Oct 17,2012 09:46CST
price review forecast
LME copper prices will move between USD 8,100-8,200/mt during Wednesday's Asian trading session, while SHFE 1301 copper contract will move in the RMB 58,500-59,200/mt range.

SHANGHAI, Oct. 17 (SMM) –It was reported Tuesday that Spain was considering applying for a line of credit, which heightened investor anticipation that the upcoming European leaders' meeting may achieve some progress in dealing with Greek and Spanish debt crisis. In response, the euro closed strongly higher, standing above 1.3. Coupled with prominent corporate earnings from some large companies, the financial market was buoyed. Later, the Fed announced economic data showing that the US industrial output rose by 0.4% MoM in September, higher than the expected 0.2%, as the tropical storm Isaac moved away and helped industrial activity in the Gulf of Mexico recover gradually. In contrast, the drop in the US industrial output for August was revised to 1.4% from 1.2%. The US industrial output, though, fell by 0.4% on a yearly basis. The manufacturing output increased by 0.2% MoM in September, and mining output rose by 0.9%. The output of infrastructure facilities climbed by 1.5% in September, and the capacity utilization rate rose by 0.3% to 78.3%, while the rate for August is revised to 78.0% from 78.2%, still below the 40 years' average of 80%. NAHB/Wells Fargo Housing Market Index rose to 41 in October from September's 40, and also the highest since June 2006. As a consequence, US equity markets closed significantly higher, and LME copper prices reached as high as USD 8,181/mt. But owing to muted market activity and technical resistance at the tail of trading, LME copper prices pared daily gains and ended at USD 8,141/mt, still up USD 16/mt.  
US economic figures came in favorable and are bullish to copper markets. As such, LME copper prices will continue fluctuating at the highs, between USD 8,100-8,200/mt during Wednesday's Asian trading session. Chinese stock markets will increase further. SHFE copper prices will start higher and then lurch, while SHFE 1301 copper contract will move in the RMB 58,500-59,200/mt range. In spot markets, as copper futures prices rebound, copper discounts will expand. However, hedged copper will be locked and cap upside room in copper discounts, which are estimated between negative RMB 50-180/mt versus SHFE 1211 copper contract. 

US data
LME copper prices
SHFE copper prices

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