SHANGHAI, Mar. 13 (SMM) – Declines in LME copper prices were arrested on Wednesday, as some investors bought on dips after three days of price falls. Other investors remained cautious with a series of Chinese data to be released. LME copper prices tested a low of USD 6,376/mt, but rose later to USD 6,543/mt before closing at USD 6,499/mt, up USD 16/mt. LME copper stocks fell below 260,000 mt.
SHFE 1406 copper contract prices increased after gaining support at RMB 44,000/mt during Wednesday’s night trading, but met resistance at RMB 45,110/mt. The SHFE copper for May delivery finished night session at RMB 44,750/mt, up RMB 100/mt. Positions for the most active contract grew by 3,542 lots. The SHFE current-month copper contract prices closed up RMB 580/mt at RMB 44,970/mt.
With an absence of any major news, markets overnight were still preoccupied by tensions in Ukraine. The Supreme Council (the Parliament) of the Autonomous Republic of Crimea approved on Tuesday the declaration on independent of the peninsula, which has cleared obstacles for this Sunday’s referendum to decide whether it will join Russia or not. Leaders of the Group of Seven economies, however, claimed on Wednesday they will not recognize the result of that vote. With the approach of the vote, markets become increasingly concerned about the situation in this area.
The US Senate Banking Committee released on Wednesday Stanley Fischer’s prepared testimony before the committee. The testimony shows the pace of US economic recovery is rocky and disappointing, and the 6.7% unemployment rate is still far too high. The US Federal Reserve will continue its easy monetary policies to shore up the fragile labor market if need be. No market-moving economic data was announced in the US on Wednesday. Meanwhile, the euro zone January industrial output unexpectedly fell by 0.2% MoM, but topped forecasts YoY. In addition, Fitch Ratings affirmed the European Union’s (EU) Long-term Issuer Default Ratings (IDRs) at ‘AAA’, and was relatively bullish about the outlooks on the long-term IDRs. In response, the euro rallied by 0.32% against the US dollar.
The US dollar index closed down 0.22%. Major Asian and European stocks ended lower, while US stocks were mixed, with the Dow Jones industrial average down 0.07%. LME base metals prices, except for LME lead prices, finished higher.
On Thursday, SHFE 1406 copper contract may trade at RMB 44,200-45,200/mt, and spot copper may be quoted between a discount of RMB 50/mt and a premium of RMB 70/mt against SHFE 1403 copper contract prices.