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55% of Chinese Copper Tube/Pipe Makers See Further Falls in Copper Prices after Slump
Mar 19,2014 22:32CST
industry news
Source:SMM
55% of the 20 copper tube/pipe producers surveyed by SMM said copper prices would fall further, with SHFE copper for June delivery expected to sink to 42,000 yuan per tonne.

SHANGHAI, Mar. 19 (SMM) – 55% of the 20 copper tube/pipe producers surveyed by SMM said copper prices would fall further, with SHFE copper for June delivery expected to sink to 42,000 yuan per tonne.

China’s first-ever corporate bond default has been the last straw for copper market, sending copper prices to a low never seen since 2010. In response, regulators stepped up monitoring of bond market which may potentially be impacted by the bond default. Baoding Tianwei Baobian Electric Co.’s bonds and stock were suspended from trading on March 11, fueling market concerns. This has left new energy industry under spotlight, and rising risk in corporate bond ignited worries over copper financing deals. That, combined with oversupply pressure in physical market, may send copper prices lower.

15% of producers expected copper prices to hover at 44,000 yuan per tonne, noting downward room might be limited after the market price in the bond default. Besides, reports on possible production cuts by copper smelters will also leave prices well-anchored.

Only 5% of producers believed prices would rebound. These producers held that market would be shored up if spot market continues to witness backwardation after the delivery date. Meanwhile, continuous falls in refined copper prices caused scrap copper suppliers to hold goods back, with price gap between scrap and refined copper narrowing. Thus, copper processors preferred to use refined copper, which would help ease oversupply in copper market.

One quarter of enterprises told SMM they were not sure where copper prices were heading.  

China copper price forecast

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