SHANGHAI, Feb. 7 (SMM) – Economic data releases were limited on Wednesday while investors awaited the European Central Bank's interest rate meeting Thursday. Markets generally believed that the ECB would keep the benchmark interest rate unchanged but would not introduce new stimulus measures either. However, some market players still expected that the ECB President Mario Draghi would still make positive comments over the euro, keeping investors cautious towards trading. The approval rating for former Italian Prime Minister Silvio Berlusconi was still increasing and raised market concerns that Italy may be sent into a political turmoil. In this context, the euro continued coming under pressure, while the US dollar marched higher, which weighed on commodity markets. LME copper prices thus extended the losing streak and dipped to a trough of USD 8,207/mt before closing at USD 8,233/mt, a decline of USD 53/mt. Nevertheless, it was worth noting that LME copper trading volumes increased for the first time following drops in recent days, due largely to the Chinese New Year holiday factor.
With market activity remaining cautious and speculators waiting for China's economic data due Friday, LME copper will likely post weaker performance, with prices expected between USD 8,180-8,260/mt during Thursday's Asian trading session. SHFE copper prices will start down before hovering around the 5-day moving average, and SHFE 1305 copper contract will hover in a band of RMB 59,300-59,900/mt. Shanghai spot copper discounts are estimated between RMB 100-200/mt versus SHFE 1302 copper contract.