SHANGHAI, Mar. 5 (SMM) – On Monday, markets were still cautious towards China's tight controls on the property sector. However, US President Obama nominated cabinet candidates of White House Office of Management & Budget and Environmental Protection Administration. Meanwhile, the Fed's Vice Chairman Janet Yellen said the central bank should not exit loose monetary policy, causing the US dollar to fall slightly. In this context, commodity markets pared some of earlier declines. Moreover, US equity markets rebounded appreciably, also providing rising momentum for copper prices. The Dow Jones Industrial Average hit a fresh high settlement price in five years, merely 37 points lower than the highest level. As a result, LME copper prices reversed previous losses and closed USD 20/mt higher at USD 7,740/mt, with support for the low-end price strengthening gradually.
Market wait-and-see sentiment is growing as copper prices stopped dropping, but the euro gained technical support at 1.30, which should lend support to copper prices. Hence, LME copper prices will likely drift higher and move between USD 7,720-7,800/mt during Tuesday's Asian trading hours. Chinese stock markets will extend weakness. SHFE copper prices will hover around current values after starting slightly higher, and SHFE 1306 copper contract will fluctuate in the RMB 56,500-57,100/mt range. Shanghai spot copper discounts are estimated between RMB 80-180/mt versus SHFE 1303 copper contract.