SHANGHAI, Mar. 21 (SMM) – Cyprus vetoed proposal to levy deposit tax on the country’s bank depositors overnight and the US Fed decided to keep low interest rate and asset purchase unchanged, dismissing market concerns. However, the US Fed lowered its growth forecast for the country’s economy during 2013-2015. What’s worth noting is that the US Fed predicted that the country’s unemployment rate will fall below 6.5% in 2015, increasing possibility of lowering interest rate. Besides, Fed Chairman Bernanke said the Cyprus issue will have little impact on the US stock market. The US Senate passed through provisional budget program, helping the US stock market close up. Against this backdrop, LME copper bucked the trend by rising among base metals during the Asian trading hours, thanks to massive short-covering. Finally, LME copper closed USD 109/mt higher at USD 7,619/mt, with its high-end price at USD 7,632/mt. Cancelled warrants of LME copper increased to 11.74%.
Major economies will announce today preliminary manufacturing PMI for March. Markets are expecting high PMI from China, the US and Europe, which will help LME copper stay at high levels. However, a lack of massive buying will keep LME copper in check within USD 7,570-7,650/mt during the Asian trading session on Thursday. The Shanghai Composite Index soared yesterday, giving a lift to base metals prices in China. Nevertheless, there are no positive factors supporting the Shanghai Composite Index, so SHFE copper prices will not rise sharply today even if China’s preliminary manufacturing PMI for March meets forecasts. SHFE 1307 copper contract prices are expected to fluctuate in the band of RMB 55,000-55,800/mt after opening slightly higher. In spot markets, SHFE copper will rebound, but upward momentum will be limited, so spot copper premiums will likely fall to RMB 50-130/mt.