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SMM Copper Market Morning Review (2014-3-11)
Mar 11,2014 10:13CST
price review forecast
On Monday, LME copper prices remained weak and closed down USD 95/mt at USD 6,682/mt.

SHANGHAI, Mar. 11 (SMM) – On Monday, LME copper prices remained weak and closed down USD 95/mt at USD 6,682/mt.

SHFE most active copper contract prices gapped lower at RMB 46,120/mt at Monday’s night trading, and fell steeply to RMB 45,560/mt before closing at RMB 46,600/mt, a decline of RMB 1,660/mt. Positions for the most active SHFE copper contract shrank by 9,786 lots during the night session, but traded volumes surged to 260,544 lots. Holdings in SHFE 1406 copper contract soared.

Without guidance from major news and economic data, markets overnight continued to digest China’s first corporate bond default, and soft CPI and trade data announced over the weekend. The People’s Bank of China (PBOC) revealed China’s new lending and social financing fell during February sharply from January’s levels. The new lending totaled RMB 644.5 billion, well below the estimated RMB 716 billion and January’s RMB 1.32 trillion, while the social financing amounted to RMB 938.7 billion, down RMB 131.8 billion YoY. The sharp fall in both new lending and social financing may be directly linked to banks’ policies towards industries to experience economic restructuring and local debts.

Economic data from Europe was mixed. France’s January industrial output fell by 0.2% during January, a smaller fall compared to December’s 0.3% drop, but missing expectations for a 0.2% increase. The nation’s manufacturing output rose during February by 0.7% MoM, while the figure remained flat during January with December’s level. Investor confidence in the euro zone for March reached 13.9, above February’s 13.3 but shy of the expected 14. The single currency bloc’s economy still fell short of expectations despite signs of recovery.

The US dollar index rose by 0.03%, and the euro climbed by 0.05% against the greenback. LME gold and silver prices fell by 0.01% and 0.42%, respectively. LME base metals prices, except LME aluminum and nickel prices, ended lower. Copper prices led the declines in base metals markets since concern about China’s demand for finance-driven copper triggered massive sell-offs.

On Tuesday, SHFE 1405 copper contract may trade at RMB 45,500-46,200/mt, and spot copper may be offered at discounts of RMB 50-150/mt against SHFE 1403 copper contract prices.

LME copper
SHFE night trading

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