SHANGHAI, Mar. 5 (SMM) – The latest SMM survey of 21 major Chinese electric wire and cable producers yielded the following results concerning copper price trend for the foreseeable future:
Around 32% of the surveyed electric wire and cable producers are pessimistic about the outlook. The lack of clear result in general election in Italy, the euro zone's third largest economy, raised market worries over the region's economic recovery. The two US political parties have yet to reach an agreement on the automatic spending cut plan and China's central bank conducted repo operations, also heightening market worries. Besides, the US dollar index is advancing continuously, while domestic copper stocks remain high. Hence, copper prices are expected to drop for the near future.
Approximately 29% of producers believe that copper prices will stay within their current levels. Downstream producers have gradually resumed operations following the Lantern Festival, and expressed relatively strong interest in replenishing stocks when copper prices dipped below RMB 57,000/mt. This can lend some support to copper prices. Nevertheless, risk events and China's NPC and CPPCC meetings during March do not allow copper prices to increase unilaterally. As such, these producers hold the view that copper prices will continue fluctuating near current values unless big favorable or unfavorable factors in fundamentals side or macro front appeared.
Approximately 10% of electric wire and cable producers are optimistic about the outlook. In their views, NPC and CPPCC meetings will launch a spate of positive policies. They also believe that the recent copper price rebound can continue over the short term.
The remaining 29% can not predict future copper prices.