SHANGHAI, Mar. 18 (SMM) –The low-end LME copper price still rose due to buying support and short-covering. LME copper prices briefly touched a high of USD 7,883/mt and regained the 5 and 10-day moving average, with prices for the week up 0.6% and with technical indicators pointing up. LME copper stocks have now risen for nearly three months and now exceed 520,000 mt.
After China released only modest industrial added value and retail sales data, the Shanghai Composite Index tumbled more than 2%. In this context, SHFE copper prices lost any upward momentum and caused the SHFE/LME copper price ratio to fall, with prices fluctuating between RMB 56,300-57,200/mt. Trading volumes increased sharply by nearly 500,000 lots, and as the delivery date for SHFE 1303 copper contracts neared, selling pressure for forward SHFE copper contracts dominated the market
In spot markets last week, since copper futures prices lacked upward momentum, some hedged copper remained locked out of spot markets. Some cargo-holders also remain optimistic toward future copper prices and held back goods, which caused copper supply to fall sharply. Over the past week, traders mostly conducted intraday operations, while downstream producers largely stood on the sidelines and resisted high premiums ahead of the delivery date for SHFE 1303 copper contracts.
SMM believes LME copper prices will hover between USD 7,730-7,880/mt, and SHFE copper prices will fluctuate between RMB 56,300-57,200/mt this coming week.