SHANGHAI, Feb. 1 (SMM) – The US on January 31 announced mixed economic data, with the Chicago PMI rising to a nine-month high of 55.6 in January. The US personal income grew 2.6% in December, well above the expected 1.0%, and also the largest increase in more than 8 years. However, the US initial jobless claims came in at 368,000 in the week ending January 26, higher than 350,000 anticipated by markets. Meanwhile, the US personal consumption expenditure increased 0.2% in December, which was in line with market economists' expectations. A spate of economic figures displayed an uneven road for the US economic recovery and dampened industrial metals that are sensitive to economic growth. Furthermore, German retail sales were sluggish while Deutsche Bank saw a big quarterly loss, which also depressed investor optimism. US and European stock markets thus closed down as capital flew out of markets. Investors became more wary about the lack of underlying metals demand amid economic recovery in top metals consumer China and the US. Although the euro surged above 1.36, LME copper prices still dipped after temporarily rising to USD 8,291/mt now that investors took caution in following higher copper prices. Testing an intraday low at USD 8,166/mt, LME copper closed at USD 8,199/mt, a loss of USD 39/mt.
Markets have absorbed earlier favorable factors while awaiting China's manufacturing PMI data and the US non-farm payrolls report. In this context, long investors will be cautious towards keeping up with rising prices, an indication of inadequate upside momentum in copper prices. LME copper prices will fluctuate between USD 8,180-8,250/mt during Friday's Asian trading hours. Chinese stock markets will hold flat. SHFE copper prices will see severe fluctuations after starting flat, and SHFE 1305 copper contract will move in a range of RMB 59,300-59,800/mt. Shanghai spot copper discounts are estimated between RMB 180-280/mt versus SHFE 1302 copper contract.