SHANGHAI, Oct. 30 (SMM) – Three-month copper on the London Metal Exchange rose to USD 7,236/mt on Tuesday on upbeat US housing data and anticipation that the US Federal Reserve will keep QE3 in place. The red metal ended the day up USD 22/mt at USD 7,199/mt. The proportion of cancelled warrants surged to 62.08%.
US retail sales in September contracted unexpectedly by 0.1% from August and were worse than forecasts. The year-on-year growth of PPI in the US slowed to 0.3% in September. The Conference Board’s consumer confidence index for October tumbled to 71.2 from 79.7, as consumers are worried about fewer job opportunities and the government’s cuts in social security spending. Home prices in 20 US cities climbed 0.9% MoM in August on a seasonally adjusted basis, beating analyst’ forecasts of a 0.6% increase and July’s 0.6% growth, according to the S&P/Case-Shiller’s home price report. The figure grew 12.8% YoY, also above a 12.5% rise estimated by analysts and marks the biggest growth since February 2006 when the growth was 13.8%. Mixed economic data strengthened expectations that the Fed will announce the delay of QE3-tapering during its October policy meeting.
The People’s Bank of China (PBOC) resumed reverse repurchase operations Tuesday after suspension for three times in a row. The central bank launched RMB 13 billion worth of 7-day reverse repos yesterday, with the bidding rate rising from 3.9% to 4.1%.
LME copper is expected to move in a USD 7,150-7,220/mt range during Wednesday’s Asian trading hours. The Shanghai Composite Index will consolidate. SHFE 1401 copper contract, the most active one, will fluctuate between RMB 51,200-51,700/mt after a high opening. In spot markets, a contango of RMB 20-140/mt is expected over SHFE 1311 copper contract.