76% of Copper Smelters Positive towards Future Copper Prices

SHANGHAI, Feb. 26 (SMM) – With regard to copper price trend for the foreseeable future, the latest SMM survey of 22 major domestic copper smelters yielded the following insights:

Approximately 76% of smelters (who were mostly contacted ahead of the Chinese New Year holiday) are optimistic over the outlook. Macroeconomic figures out of China, Europe, and the US all came in favorable since early January, with the final HSBC China manufacturing PMI for January revised upward to 52.3, a fresh two-year high. The final reading of the euro zone's manufacturing PMI also rose to 47.9 in January, a new 11-month top, while the composite euro zone PMI surged to a 10-month high of 48.6 in January. The US manufacturing PMI increased to 53.1 in January, also a fresh nine-month high. These economic data showed that global economy is recovering mildly. Therefore, markets are generally upbeat about post-holiday copper consumption while relatively loose monetary environment also provides rising momentum for copper prices.

Around 14% of copper smelters see copper prices holding flat with recent levels for the near future. In their views, the US dollar index remains above 81 and exert great pressures to copper prices, despite comparatively loose credit environment. Besides, the euro zone's 4Q GDP data was softer than anticipated. Fed vice chairman Yellen said the US employment growth is still slow. Therefore, copper prices will fluctuate near current values for the immediate future.

Roughly 5% of smelters are pessimistic, pointing in part to the advancing US dollar. Furthermore, domestic stock markets trended down following the Chinese New Year holiday, and investors speculate the Fed would end economic stimulus measures earlier than scheduled. Also weighing on copper markets is the fact that China's government continues curbs on the housing market.

The remaining 5% of copper smelters can not predict future copper prices.