SHANGHAI, Jan. 28 (SMM) – Last Friday, the German IFO Business Climate Index rose to 104.2 in January, topping market forecast of 103.1, and also the highest since June 2012. In response, German stock markets saw a fresh 5-year high of settlement price. The US Commerce Department announced new home sales in December slipped 7.3% MoM and ended rising momentum for three consecutive months, but still registered an 8.8% YoY growth. For all of 2012 the median price of a new home sold was USD 243,600, a new top since 2007, which helped US equity markets close higher with the Standard & Poor's 500 Index settling above 1,500 for the first time since 2007. Meanwhile, the European Central Bank (ECB) President Mario Draghi predicted that the euro zone economy will recover later this year and buoyed European stock markets and crude oil prices. The euro also closed significantly higher by over 0.7%. Nevertheless, LME copper prices seemed to neglect these favorable factors and fell all the way now after Anglo American's Collahuasi copper mine reported its output increased 2% YoY to 172,900 mt, higher than anticipated. LME copper prices dipped to a trough of USD 8,010/mt, but narrowed daily declines after gaining technical support at the 30-day moving average, with the settlement price at USD 8,042/mt.
LME copper may pare some of losses recorded last Friday as the euro fluctuating at highs will lend some support, with prices expected between USD 8,030-8,100/mt during Monday's Asian trading session. Chinese stock markets will stop falling. SHFE copper prices will open down before hovering around RMB 58,500/mt, but narrow daily drops at the tail of trading. SHFE 1305 copper contract will fluctuate in the RMB 58,200-58,800/mt range. Shanghai spot copper discounts are estimated between RMB 120-220/mt versus SHFE 1302 copper contract.