SMM Brief on SHFE Copper Prices (2013-1-4)

SHANGHAI, Jan. 4 (SMM) – The two political parties in the US reached a deal on the fiscal cliff during the New Year holiday, and helped LME copper prices touch as high as USD 8,256.2/mt on January 3. Nevertheless, the Fed officials held divergence on when to end QE3 measures, causing LME copper prices to fall after initially rising and close at USD 8,149/mt. SHFE 1304 copper contract, the most active one, opened RMB 800/mt up at RMB 58,610/mt on January 4, but then suffered short selling before slipping to RMB 58,320/mt. The contract later rose but still met upside pressure, hovering narrowly around RMB 58,310/mt after dipping again. SHFE 1304 copper contract settled RMB 550/mt or 0.95% higher at RMB 58,360/mt, with trading volumes and positions increasing by 17,834 lots and 10,614 lots, respectively. With severe struggle between longs and shorts, the yearly high levels may become key support for SHFE copper prices over the short term.