SHANGHAI, Oct. 8 (SMM) – 45% of the 20 wire and cable producers surveyed by Shanghai Metals Market (SMM) held a cautious attitude towards copper price trends recently, expecting that LME lead prices will be between USD 7,100-7,250/mt. These producers believe that the lack of new major stories in the market after the Federal Reserve postponed a QE tapering will lead copper consumers to purchase as needed, and copper prices will unlikely make any breakthrough given mixed economic data and uncertainties in the market.
20% of producers were bullish, saying that investors have digested the impact of the QE taper and market is more focusing on the Third Plenary Session of the 18th CPC Central Committee, with Chinese stock markets being above 2,100 lately. In addition, the news on re-launch of IPO in October and tight financing in Q3 did not cause any panic in the market, a reflection that market remains relatively optimistic to China’s economic prospects. As such, copper prices may still present rises during the high demand month of October, with LME copper testing resistance at the USD 7,400-7,500/mt.
5% of producers were pessimistic, believing that copper market will face growing oversupply pressure in Q4. The falling premiums for spot copper and rising copper stocks indicated that domestic copper consumption is growing more slowly than supply. Besides, expectation for improving demand in the traditional high demand season of September and October failed to materialize. Thus, an increasing number of investors preferred to sell at high prices, combined with continued liquidity squeeze in Q4, copper prices are believed to drop further below USD 7,000/mt.
The remaining 30% of producers were not sure where are copper prices heading to.