SHANGHAI, Jan. 18 (SMM) – There were merely a few pieces of macro news Thursday, but the US economic data saw prominent performance. The US Commerce Department announced that US housing starts surged by 12.1% in December and increased to 954,000 units for the whole year of 2012, both the highest level since June 2008. Positive news also included the US initial jobless claims, which dropped to 335,000 from seasonally adjusted 370,000 in the week ending January 12, the lowest in the past five years. Encouraging US housing and labor market data buoyed investor confidence and helped US equity markets close with considerable gains. Commodity markets rebounded as a result, with LME copper prices touching a high at USD 8,065/mt before settling at USD 8,058/mt. However, LME copper positions still decreased as markets shifted their attention to a spate of Chinese economic figures to be released Friday. This indicated that investors were wary of keeping up with rising prices.
LME copper is likely to suffer profit-taking at highs and has limited upside space while investors eye China's economic data. As such, SMM expects LME copper prices to move between USD 8,000-8,080/mt during Friday's Asian trading session. SHFE copper prices will start higher and long and short investors will conduct severe struggle at the RMB 58,000/mt mark. SHFE 1304 copper contract will fluctuate in a band of RMB 57,800-58,400/mt. Shanghai spot copper discounts are estimated between RMB 120-200/mt versus SHFE 1302 copper contract.