SHANGHAI, Aug. 14 (SMM) – Shanghai Metals Market (SMM) conducted a survey of 22 domestic copper tube/pipe producers, finding that 27% of them were bullish. These producers expect LME copper to rise to USD 7,400/mt given positive economic data released lately. Despite unloosened liquidity conditions in China, the worst of the liquidity crunch is believed over, and the recent net injection in money market by the People’s Bank of China may also help with a recovery in market. China’s copper imports increased in July, while copper consumption in July and August was satisfactory. Therefore, these producers hold that copper prices may present a rebound after a month of correction. 

 

18% of producers expect copper prices may not be able to make any breakthrough, only hovering at USD 7,000-7,200/mt. In spot copper markets, consumption softened following the rallies in copper prices, with quotes down markedly and buying support limited. Although some shorts liquidated position, many investors predicted a pullback in copper prices as the short selling at high prices may restrict any increase in prices. 

 

14% of surveyed producers were bearish, arguing that economy has not yet shown substantial improvement. Audits for local debts will continue to constrain local refinancing capacity, so financial problems may still a major issue confronting domestic enterprises in the second half of the year. Furthermore, the tight cash flow may sprawl, preventing enterprises from replenishing stocks in large amounts and reining in speculative buying. In this context, copper prices are expected to fall back below USD 7,000/mt. 

 

As much as 41% of them were unclear about copper price trends.