SMM Copper Market Morning Review (2013-10-16)

Price Review & Forecast 09:57:38AM Oct 16, 2013 Source:SMM

SHANGHAI, Oct. 16 (SMM) – Members of the US Congress remains divided over raising the government’s debt ceiling, further jittering markets, which are already pressured by growing concerns over global supply glut. Investors are still clinging to the hope that the Senate’s proposal will eventually bring ongoing partial government showdown to an end and avert unprecedented default. Fitch Ratings warned Tuesday of a possible downgrade in the sovereign credit rating of the US from AAA, citing the standoff over raising the federal debt ceiling. As a consequence, US shares edged down, while gold and crude oil prices also fell. European stock markets, in contrast, closed up on encouraging German economic indicators, with German stocks hitting record high. LME copper dropped to USD 7,210/mt before closing at USD 7,262/mt, relatively resistant to declines among base metals.  

Looming debt ceiling deadline in the US continued to cast a shadow on the market. Sources indicated Monday that the Senate was close to reaching a deal that reopens the government until January 15 and extends the debt ceiling by February 7. However, House Speaker Boehner’s GOP plans on Tuesday morning was rejected by President Obama. Senate Majority Leader Harry Reid and Minority Leader Mitch McConnell agreed Tuesday night to restart their discussions. Fitch Ratings warned Tuesday it may cut the sovereign credit rating of the US from AAA given the fiscal stalemate in the country, sending US shares down.  

The UK's inflation rate remained at 2.7% in September. However, both output and input prices in the country fell unexpectedly in the same month. Germany’s ZEW economic sentiment jumped to 52.8 in September, the highest since April 2010, buoyed by rising European shares. 

China’s State Council released Guidelines on Easing Severe Overcapacity, indicating the central government’s resolution on economic restructuring.

Market caution will hold LME copper in check within USD 7,220-7,270/mt during Wednesday’s Asian trading hours. The Shanghai Composite Index will nudge up. SHFE 1401 copper contract will fluctuate between RMB 52,000-52,500/mt. In spot markets, cargo holders will hike offers after SHFE 1311 copper contracts shift to the new current-month contracts, but buyers will show low acceptance. A backwardation of RMB 0-120/mt is expected over SHFE 1311 copper contract. 

Key Words:  LME copper   SHFE copper  

SMM Copper Market Morning Review (2013-10-16)

Price Review & Forecast 09:57:38AM Oct 16, 2013 Source:SMM

SHANGHAI, Oct. 16 (SMM) – Members of the US Congress remains divided over raising the government’s debt ceiling, further jittering markets, which are already pressured by growing concerns over global supply glut. Investors are still clinging to the hope that the Senate’s proposal will eventually bring ongoing partial government showdown to an end and avert unprecedented default. Fitch Ratings warned Tuesday of a possible downgrade in the sovereign credit rating of the US from AAA, citing the standoff over raising the federal debt ceiling. As a consequence, US shares edged down, while gold and crude oil prices also fell. European stock markets, in contrast, closed up on encouraging German economic indicators, with German stocks hitting record high. LME copper dropped to USD 7,210/mt before closing at USD 7,262/mt, relatively resistant to declines among base metals.  

Looming debt ceiling deadline in the US continued to cast a shadow on the market. Sources indicated Monday that the Senate was close to reaching a deal that reopens the government until January 15 and extends the debt ceiling by February 7. However, House Speaker Boehner’s GOP plans on Tuesday morning was rejected by President Obama. Senate Majority Leader Harry Reid and Minority Leader Mitch McConnell agreed Tuesday night to restart their discussions. Fitch Ratings warned Tuesday it may cut the sovereign credit rating of the US from AAA given the fiscal stalemate in the country, sending US shares down.  

The UK's inflation rate remained at 2.7% in September. However, both output and input prices in the country fell unexpectedly in the same month. Germany’s ZEW economic sentiment jumped to 52.8 in September, the highest since April 2010, buoyed by rising European shares. 

China’s State Council released Guidelines on Easing Severe Overcapacity, indicating the central government’s resolution on economic restructuring.

Market caution will hold LME copper in check within USD 7,220-7,270/mt during Wednesday’s Asian trading hours. The Shanghai Composite Index will nudge up. SHFE 1401 copper contract will fluctuate between RMB 52,000-52,500/mt. In spot markets, cargo holders will hike offers after SHFE 1311 copper contracts shift to the new current-month contracts, but buyers will show low acceptance. A backwardation of RMB 0-120/mt is expected over SHFE 1311 copper contract. 

Key Words:  LME copper   SHFE copper