SHANGHAI, Oct. 22 (SMM) – China’s refined copper imports in September hit a 19-month high, surging by 32% MoM, and 18% YoY. The country’s copper concentrate imports also soared by 45% from a year ago. However, China’s output of refined copper also hit record high, as new capacity was brought online and as growing supply of raw materials boosted production at smelters. Existing home sales in the US in September missed forecasts. US shares were mixed. Markets were cautious ahead of the release of US non-farm employment report for September and corporate earnings reports, causing trading volumes in base metals markets to drop. LME copper moved in a tight range on Monday, closing up USD 27/mt at USD 7,252/mt.
Charles Evans, President of the Federal Reserve Bank of Chicago, said the Fed needs more time to study economic data due to great impact from the government shutdown. This means it might take a longer time before the Fed begins to slow the pace of its monetary stimulus. This also echoes Bloomberg’s poll of 400 economists over the weekend, most of whom believe that QE3 taper will be delayed to March 18-19 next year.
China’s A-share rose markedly on Monday, boosted by news that “T+0” will apply to bond ETF, gold ETF, etc. Forex receipts at financial institutions in China increased by RMB 126.4 billion in September, compared with a RMB 27.3 billion increase in August. This markets the first positive growth in three months. The sharp growth in forex receipts suggests massive inflows of foreign capital into China, speeding up appreciation of RMB.
Caution will rule the market ahead of upcoming US non-farm payrolls, holding LME copper in check within USD 7,220-7,270/mt during Tuesday’s Asian trading hours. The Shanghai Composite Index will tick up. SHFE 1401 copper contract will fluctuate between RMB 52,000-52,400/mt after a high opening. In spot markets, a contango of RMB 0-100/mt is expected over SHFE 1311 copper contract.