SMM Copper Market Morning Review (2013-3-20)

SHANGHAI, Mar. 20 (SMM) – Lawmakers in Cyprus rejected the bill on bank deposit tax overnight, igniting concerns over the economic stability of the euro zone. European equities thus continued to fall, with those in Greece and Spain down over 2%. On the other hand, the US housing starts for February were up 0.8% to touch a 5-year high. In this context, most investors turned to the US dollar for risk averse, sending the dollar to 83. Coupled with selling pressures from short activity, LME copper prices dropped below USD 7,500/mt to hit a low of USD 7,486/mt before closing at USD 7,510/mt, its lowest level since last August.

SHFE 1307 copper contract price is expected to open lower and move between RMB 54,400-55,200/mt, and price gap between standard and high-quality copper should expand, with spot premiums over the most active SHFE copper contract price expected at RMB 80-200/mt.