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SMM Copper Market Morning Review (2014-3-14)
Mar 14,2014 09:56CST
price review forecast
On Thursday, China’s industrial output, investment, and consumption were all reported lower than expected.

SHANGHAI, Mar. 14 (SMM) – On Thursday, China’s industrial output, investment, and consumption were all reported lower than expected. Although some investors, especially in Europe, were lured to purchases copper when prices slumped, the buying lent limited support to copper prices. LME copper prices closed at an intraday low of USD 6,400/mt.

SHFE most active copper contract prices started lower at RMB 44,370/mt and dipped as low as RMB 44,120/mt before closing at RMB 44,190/mt, down RMB 400/mt. Positions for the most active contract continued to increase.

In the US, the number of Americans applying for first-time jobless benefits fell to 315,000, a bigger fall than expected and the lowest level since November 2013. Retail sales beat expectations to grow 0.3% MoM during February, the first monthly gains since three month ago, indicating US economy and labor market are gradually improving. US government’s February budget deficit totaled USD 193.5 billion, exceeding forecasts. In addition, the US and European Union will reportedly cancel bilateral tariffs. These positive economic data failed to give a boost to market confidence, however. Goldman Sachs thus lowered its forecast for US Q1 GDP growth to 1.5% from 1.7%. Major three US stock indexes all closed significantly lower.

In Europe, France’s February CPI rose more than expected by 0.9% from a year ago. European Central Bank (ECB) President Mario Draghi later claimed the ECB is poised to introduce non-standard measures to tackle deflation. The easing comments sent the euro down 0.26% against the dollar, denting the single currency’s investor interest in buying base metals.

The US dollar index eased 0.01%. Asia-Pacific stocks were mixed, while major European and US stocks closed lower. LME base metals prices, except for LME nickel prices, all finished with losses.

On Friday, SHFE 1406 copper contract may trade at RMB 44,000-44,600/mt, and spot copper may be quoted between a discount of RMB 50/mt and a premium of RMB 50/mt against SHFE 1403 copper contract prices.

LME copper
SHFE night trading

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