SHANGHAI, Mar. 19 (SMM) – Investors are worried that other ailing EU members may follow suit after Cyprus decided last Saturday to impose one-off tax on bank depositors. Latest data show that the yields of Cyprus’s bonds to mature in June 2013 more than doubled to 70%, while the yields of bonds due in 2020 rose 2% to 10.4%. Stock markets in the US, Germany and France fell around 0.5%, while the Spanish and Italian stock markets lost 0.9% and 1.3%, respectively. Cyprus also announced to close all the banks in the country on Tuesday and Wednesday. The euro shed 0.9%, its sharpest decline in fourteen months. The US dollar and gold, in contrast, rose for their safe-haven appeal. LME copper closed overnight at USD 7,567/mt, down nearly 2.5%. LME copper inventories surged 18,100 mt to 543,925 mt, the highest since February 2010. Copper oversupply may weigh down copper prices in the second half of this year.

The latest statement from the euro zone finance ministers’ meeting show that depositors in Cyprus with savings below 100,000 euro should not be imposed tax, helping appease some panic-stricken citizens and easing short selling. LME copper should move within USD 7,540-7,620/mt during Asian trading hours on Tuesday. The Shanghai Composite Index will extend losses. SHFE 1307 copper contract prices are expected to fluctuate in the band of RMB 54,600-55,400/mt after a low opening today. In spot markets, cargo holders will hold offers less firm after SHFE copper prices dropped, with spot discounts expected between RMB 0-20/mt and premiums between RMB 0-80/mt.