SHANGHAI, Nov. 12 (SMM) –China's NBS reported last Friday that China's CPI grew in October by 1.7% YoY, a low growth rate last seen in February 2010. Although favorable news came from the 18th National Congress, it failed to boost Chinese A-shares, with the Shanghai Composite Index falling below 2,100 or down by 1.5%. SHFE copper prices did show more resistance to declines, but still felt pressure at RMB 57,000/mt despite buying support at around RMB 55,500/mt. Total positions on the SHFE increased by roughly 40,000 lots during the week, but markets were still dominated by short investors. Technical indicators for SHFE copper were pointing down.

In spot markets last week, copper offers turned into premiums after SHFE copper prices plunged. However, as hedged copper flew into markets and since the SHFE/LME copper price ratio rose to 7.31, more imported copper came into markets, helping spot copper supply grow. Trader buying interest was depressed as copper premiums were limited, but some downstream producers bought between RMB 55,600-55,800/mt.

SMM believes SHFE copper prices will continue to test support at RMB 55,500/mt in the coming week.