SMM Brief on SHFE Copper Prices (2013-3-6)

SHANGHAI, Mar. 6 (SMM) – As LME copper prices holding flat overnight, the most active SHFE 1306 copper contract opened slightly RMB 120/mt up at RMB 56,940/mt Wednesday. The contract broke through RMB 57,000/mt to challenge a high at RMB 57,150/mt, but then marched down all the way as short investors exerted more selling pressures, with prices touching a trough at RMB 56,640/mt. However, a strong Chinese A-share market during the day gave some support to the low-end copper price. SHFE 1306 copper contract finally settled at RMB 56,700/mt, still down RMB 120/mt or 0.21%. Trading volumes for the most active copper contract added by 10,458 lots, but positions fell 9,726 lots. SHFE copper prices suffered resistance at the 10-day moving average after breaking pressure at the 5-day moving average, but the KDJ indicator pointed upside. As such, SMM believes that SHFE copper prices will continue to consolidate at lows for the immediate future.