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SMM Copper Market Morning Review (2014-3-3)
Mar 3,2014 09:47CST
price review forecast
Last Friday, the US stocks closed mixed, with S&P 500 index hitting new highs.

SHANGHAI, Mar. 3 (SMM) – Last Friday, the US stocks closed mixed, with S&P 500 index hitting new highs. Investors were pondering improvement in the consumer confidence index and government officials’ remarks on the Ukraine crisis. The US Commerce Department announced Friday that the 4Q GDP growth for the country was revised to 2.4% QoQ, lower than estimate and Q3’s growth. The figure raised speculations that the Fed may possibly suspend QE taper. In the euro zone, inflation remained stable, cooling expectation for monetary easing by the European Central Bank. In this context, the US dollar index fell to 79.772, help LME copper prices pare declines and finish at USD 7,012.3/mt, down USD 18.5/mt.

SHFE 1405 copper contract prices moved between RMB 49,120-49,330/mt during last Friday’s night trading and closed the session down RMB 60/mt at RMB 49,150/mt. Traded volumes for the most active contract were 68,000 lots during night session, and positions shrank by 554 lots.

Last Friday, good news was heard from Europe, with CPI growing 0.8% YoY during February, beating the 0.7% rise expected. Core-CPI in the currency union rose 1% during the same period, higher than the 0.8% estimate. Hence, market anticipates that the ECB may raise interest rate at the next policymaking meeting. In Germany, January retail sales increased 2.5% on the month, significantly higher than the 1% growth analysts had expected and staging its biggest rise since February 2007.

In the US, GDP growth for Q4 2013 was revised down to 2.4%, missing the 2.5% forecast. The euro thus climbed 1.38% against the dollar.

In other vital news, political crisis in Ukraine continued to escalate. Russia’s parliament has approved President Vladimir Putin’s request for Russian forces to be used in Ukraine “until the normalisation of the political situation in the country”. US President Barack Obama warned Russia that it should rethink its military intervention in Ukraine, and US government officials said Obama is considering not attending June’s G8 Summit in Sochi, Russia, and reassessing economic relations between US and Russia.

In China, the official manufacturing PMI was reported at 50.2 in February, an eight-month low. China’s foreign trade in goods hit USD 4.16 trillion in 2013, making it the largest goods trading nation in the world. Its exports in goods totaled USD 2.21 trillion in 2013, and imports were USD 1.95 trillion.

European and US stocks were mixed last Friday. All base metals on London Metal Exchange, except for nickel, closed lower. The weaker US dollar may lend some support to SHFE base metals.

On Monday, SHFE 1405 copper contract prices are expected at RMB 48,900-49,400/mt, and spot copper may be offered at discounts of RMB 100-250/mt against the SHFE current month copper contract prices.


LME copper
SHFE night trading

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