SHANGHAI, Apr. 16 (SMM) – The latest SMM survey of 21 domestic copper tube/pipe producers finds that 30% of producers expect copper prices to hold around RMB 55,000/mt in response to no major positive news, mixed US economic data, and no significant changes in stocks in warehouses. Besides, bargain hunters entered the market at lower prices, but the market was still dominated by a cautious attitude, which will not support high copper prices.
Approximately 25% of producers in the survey expect prices to drop. According to the latest minutes of the US Federal Reserve interest rate meeting, some officials were considering to ending QEs. This, coupled with buy-back operation in China, will raise market fears of money supply. With a lack of easing monetary environment, market focus will be shifted to fundamentals. High inventories at warehouses will dampen market confidence. Hence, they believe that copper prices will continue to fall.
Around 15% of producers understand that copper prices will rebound due to the following two factors. First, China’s CPI eased in March, allowing more room to adjust its policy. Second, copper consumption is expected to improve in 2Q, but declines in copper imports and unwillingness to move goods at low prices have actually tightened spot supply, despite high stocks at warehouses. Third, economic data for April are expected to improve further, and this will bode well for copper prices.
The rest 30% are unclear about the trend.