SMM Copper Market Daily Review (2012-10-29)-Shanghai Metals Market

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SMM Copper Market Daily Review (2012-10-29)

Price Review & Forecast 10:54:41AM Oct 30, 2012 Source:SMM

SHANGHAI, Oct. 30 (SMM) -- As LME copper prices extended weak momentum overnight, the SHFE 1302 copper contract, the most active one opened RMB 60/mt lower at RMB 56,910/mt. SHFE cooper contract meet strong resistance at RMB 57,000/mt and moved around RMB 56,850/mt for most of the time. During the afternoon trading hours SHFE copper prices hit a new low at RMB 57,570/mt as LME copper prices fell further and Shanghai Composite Index slipped. Finally, LME copper closed at RMB 56,580/mt, down RMB 390/mt or 0.68% from a day earlier. Trading volumes were down 15,282 lots and positions increased by 20,040 lots. Technically speaking, LME copper prices faced downward pressure.

In the Shanghai copper spot market, spot discounts narrowed as futures copper prices were weak. However, as wait-and-see sentiment was strong, discounts expanded from RMB 220/mt to 100/mt. Traded prices of standard-quality copper were between RMB 56,750-56,850/mt and traded prices of high-quality copper were between RMB 56,830-56,950/mt. Some traders replenished high-quality copper, but downstream consumers still adopted a wait-and-see attitude. During the afternoon trading hours, transactions were still limited, and spot discounted narrowed limitedly to RMB 60-150/mt, with traded prices falling to RMB 56,600-56,800/mt.

Based on result of SMM survey on market sentiment, most market players did not expected copper prices to rise, but 58% market players believe that copper prices will not fall further and will move around USD 7,800/mt in the following week. A slew of important economic data will be released this week, including the US consume confidence index, ADP, and non-farm employment data. Market expectation is optimistic towards the data, which may support the US equity market and prevent copper prices from slipping. In addition, HSBC China PMI and China’s official PMI both improved. Third, cash flow pressure will be eased in early November, which will support copper prices. Therefore, copper prices may be poised to rise.

The remain g 42% pessimistic market players believe that LME copper prices will fall further to test USD 7,700/mt and SHFE copper prices will find support at USD 56,000/mt. First, the European debt crisis is unlikely to report significant progress in the short term, and will continue to weigh on financial market. Second, the US dollar has advanced above 80, and is on upward trend technically. Third, according to data from CRTF, positions reduced from 11,495 lots to 6,903 lots. Longs exited market and shorts entered instead. Fourth, although SHFE copper prices are relatively resilient, prices are on downward track technically. Finally, demand in spot market is lackluster. Therefore, they hold that copper prices will fall further in the coming week.
 

Relative News

Price

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#1 Refined Cu
Dec.11
48485.0
65.0
(0.13%)
Standard-Grade Copper
Dec.11
48475.0
65.0
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High-Grade Copper
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48490.0
60.0
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Guixi Copper
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Low-Quality Copper
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75.0
(0.16%)

SMM Copper Market Daily Review (2012-10-29)

Price Review & Forecast 10:54:41AM Oct 30, 2012 Source:SMM

SHANGHAI, Oct. 30 (SMM) -- As LME copper prices extended weak momentum overnight, the SHFE 1302 copper contract, the most active one opened RMB 60/mt lower at RMB 56,910/mt. SHFE cooper contract meet strong resistance at RMB 57,000/mt and moved around RMB 56,850/mt for most of the time. During the afternoon trading hours SHFE copper prices hit a new low at RMB 57,570/mt as LME copper prices fell further and Shanghai Composite Index slipped. Finally, LME copper closed at RMB 56,580/mt, down RMB 390/mt or 0.68% from a day earlier. Trading volumes were down 15,282 lots and positions increased by 20,040 lots. Technically speaking, LME copper prices faced downward pressure.

In the Shanghai copper spot market, spot discounts narrowed as futures copper prices were weak. However, as wait-and-see sentiment was strong, discounts expanded from RMB 220/mt to 100/mt. Traded prices of standard-quality copper were between RMB 56,750-56,850/mt and traded prices of high-quality copper were between RMB 56,830-56,950/mt. Some traders replenished high-quality copper, but downstream consumers still adopted a wait-and-see attitude. During the afternoon trading hours, transactions were still limited, and spot discounted narrowed limitedly to RMB 60-150/mt, with traded prices falling to RMB 56,600-56,800/mt.

Based on result of SMM survey on market sentiment, most market players did not expected copper prices to rise, but 58% market players believe that copper prices will not fall further and will move around USD 7,800/mt in the following week. A slew of important economic data will be released this week, including the US consume confidence index, ADP, and non-farm employment data. Market expectation is optimistic towards the data, which may support the US equity market and prevent copper prices from slipping. In addition, HSBC China PMI and China’s official PMI both improved. Third, cash flow pressure will be eased in early November, which will support copper prices. Therefore, copper prices may be poised to rise.

The remain g 42% pessimistic market players believe that LME copper prices will fall further to test USD 7,700/mt and SHFE copper prices will find support at USD 56,000/mt. First, the European debt crisis is unlikely to report significant progress in the short term, and will continue to weigh on financial market. Second, the US dollar has advanced above 80, and is on upward trend technically. Third, according to data from CRTF, positions reduced from 11,495 lots to 6,903 lots. Longs exited market and shorts entered instead. Fourth, although SHFE copper prices are relatively resilient, prices are on downward track technically. Finally, demand in spot market is lackluster. Therefore, they hold that copper prices will fall further in the coming week.