SHANGHAI, Feb. 19 (SMM) – On Monday, the SHFE copper market was re-opened following the Chinese New Year holiday, but Chinese investors seemed to have no trading sentiment. Meanwhile, ECB president Draghi reiterated the ECB's view that the euro's exchange rate is not a policy target and is "around its long-term average". He added the euro's appreciation could threaten to pull down inflation too far. Draghi also said G20's statement is not discouraging as most changes in currency exchange rate are aimed at boosting the economy. His comments caused the euro to extend declines, but the US dollar continued to advance. As a consequence, LME copper prices extended weakness and tested a low at USD 8,107/mt before closing at USD 8,125/mt, a loss of as high as 1.4%. Besides, long investors tended to leave markets, so investors should be cautious towards trading.
The euro is likely to remain weak. LME copper prices will continue testing support at USD 8,100/mt and move between USD 8,100-8,180/mt during Tuesday's Asian trading session. SHFE copper prices will lower to test RMB 58,700/mt after starting down, with resistance at RMB 59,000/mt. SHFE 1305 copper contract will hover in a range of RMB 58,500-59,100/mt. Shanghai spot copper discounts are estimated between RMB 20-100/mt versus SHFE 1303 copper contract.