SHANGHAI, Mar. 26 (SMM) – LME copper prices hit a high of USD 6,623/mt on Tuesday and finished at USD 6,571/mt, rising 1.58%. The US consumer confidence index for March climbed to its highest since January 2008, when combined with the efforts made by the US and EU to end crisis in Ukraine as well as the first meeting between heads of Russia and Ukraine, European and US stocks increased. In other news, protest at Anglo American’s Los Bronces mine in Chile triggered concerns over supply and drove copper prices up. However, the cash-to-three-month backwardation in LME copper fell to USD 3/mt.
Aided by rising LME copper prices, the June-delivery SHFE copper extended gains during Tuesday’s night trading after opening higher at RMB 46,150/mt. SHFE 1406 copper contract prices tested a high of RMB 46,400/mt before ending at RMB 46,240/mt, up RMB 620/mt. About 340,000 lots were traded for the most active contract at the night session, and positions increased by 9,998 lots.
US February new home sales and March Richmond Fed manufacturing index released overnight both missed expectations. The Conference Board’s consumer confidence index for March, however, was reported at 82.3, a fresh six-year high and well above market forecasts. The US economy is expected to gain further momentum, pushing up the country’s stocks to close higher across the board. In addition, markets responded little to speeches by several US Federal Reserve officials which released no much new cue on the monetary policy.
The euro was continuously subdued versus the US dollar in early European trading hours, affected by relatively dovish comments by Deutsche Bundesbank President Jens Weidmann, and European Central Bank Governing Council member Jozef Makuch and Erkki Liikanen. The single currency later rallied to pare most losses after ECB President Mario Draghi lowered market expectation for easy monetary policies by asserting the rise in the euro was due to market confidence recovery and instability in other regions.
Russian Foreign Minister, Sergei Lavrov, held the first meeting with Ukrainian Acting Minister of Foreign Affairs Andrii Deshchytsia on Ukraine’s outlook and current situation at the nuclear security summit in The Hague on March 24. The further de-escalation in the Ukraine crisis lent some support to global stock markets.
The US dollar index closed up 0.02%. The euro eased 0.1% against the greenback. Global stocks ended higher broadly. LME base metals prices, except for LME nickel prices, finished with gains.
On Wednesday, SHFE 1406 copper contract should trade at RMB 45,600-46,500/mt, and spot copper may be quoted at premiums of RMB 120-180/mt over the SHFE 1404 copper contract prices.