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SMM Copper Market Morning Review (2014-3-18)
Mar 18,2014 09:42CST
price review forecast
Source:SMM
On Monday, stock and base metals markets were not significantly affected by result of Crimea’s referendum which was in line with expectation.

SHANGHAI, Mar. 18 (SMM) – On Monday, stock and base metals markets were not significantly affected by result of Crimea’s referendum which was in line with expectation. In the US, the Empire State manufacturing index improved slightly in March, and the country’s industrial output value grew at the fastest pace in February, driving up European and US stocks. LME copper prices hit a high of RMB 6,540/mt helped by buying support and ended at USD 6,478/mt, up USD 16/mt.

SHFE 1406 copper contract prices started higher at RMB 44,770/mt during Monday’s night trading and rose to RMB 44,830/mt. The June-delivery SHFE copper then moved lower to test RMB 44,420/mt before closing the session at RMB 44,580/mt, up RMB 20/mt. Traded volumes for the most active contract dropped to 298,485 lots, and positions increased by 8,886 lots.

Some 95% of voters in Crimea have supported joining Russia according to the Crimea’s referendum. In response, the US and EU are expected to announce sanctions against Russia, including visa bans and potential asset freezes. President Obama also froze assets and banned travel for 11 Russian and Ukrainian figures, including the pro-Russia Vladislav Surkov. An expansion of the sanctions list could come soon at the EU summit. European and US stocks rose across the board after the release of the outcome.

Economic data from the US and Europe were mixed. The euro zone inflation for February was revised downward to 0.7%, its lowest since October 2013. In the US, February industrial output rose 0.6% on the month, exceeding the 0.2% growth expected, while capacity utilization rate for February was reported at 78.8%, also surpassing the 78.6% forecast and January’s 78.5%. However, the NAHB housing index was only 47 in March, lower than the 50 expected, showing that home builders were less than optimistic about housing market.

In China, another default was reported with Zhejiang Xingrun Real Estate Co. failing to repay the debt. This has rekindled concerns over a property crash which may deprive Chinese economy of any driving force.

The US dollar index dropped to 79.38. All base metals, except zinc and aluminum, increased on Monday.

On Tuesday, SHFE 1406 copper contract may trade at RMB 44,400-44,900/mt. Spot copper may be offered between a discount of RMB 50/mt and a premium of RMB 20/mt against SHFE 1404 copper contract prices.
 

LME copper
SHFE night trading

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