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SMM Copper Market Morning Review (2014-6-5)
Jun 5,2014 09:19CST
price review forecast
Source:SMM
On Wednesday, the Fed’s Beige book indicated modest growth in most of federal districts, and the US trade deficit expanded to a 2-year high in April, boosting US stocks.

SHANGHAI, Jun. 5 (SMM) – On Wednesday, the Fed’s Beige book indicated modest growth in most of federal districts, and the US trade deficit expanded to a 2-year high in April, boosting US stocks. However, China’s probe into financing trade at Qingdao port triggered concerns over weakening copper demand. The US ADP employment data for May missed forecast and hit a 4-month low, leaving investors cautious towards the nonfarm payroll data. LME copper came under selling pressure, testing a low of USD 6,760/mt before ending USD 79/mt lower at USD 6,785/mt.

SHFE most active copper contract prices gapped lower at RMB 47,880/mt during Wednesday’s night session and regained some losses after shorts booked profits. The prices then met resistance at RMB 48,140/mt and closed the session down RMB 90/mt at RMB 48,130/mt. Traded volumes for the August copper contract soared to 150,000 lots, and positions increased by 896 lots.

In China, an investigation into copper and aluminum financing irregularities at the port of Qingdao raised further concerns over the country’s metals financing practice, weighing down base metals prices.

The euro zone’s final composite PMI for May was revised down to 53.5, lower than the preliminary reading and April’s level. The single currency bolc’s final GDP grew 0.2% QoQ in the first quarter, slowing down from the final quarter last year. These negative economic data, combined with soft inflation released Tuesday, will enhance expectations for the European Central Bank to unveil accommodative monetary policy.

Meanwhile, US ADP jobs report showed that a total of 179,000 new jobs were created in May, the smallest rise since January and that April’s figure was revised down to 215,000 from 220,000. The disappointing jobs report is expected to put a damper on US nonfarm payrolls due for release on Friday. In addition, the country’s ISM non-manufacturing PMI scaled a fresh 9-month high of 56.3 in a sign that growth in the US service sector gathered pace. The sub-index for new orders also rose to its highest since January 2011.

The US dollar index advanced 0.17% to close at 80.67. The euro eased 0.21% against the US dollar. Major stock indices across the world were mixed. LME base metals ended down, except for nickel.

On June 5, SHFE copper for August delivery may trade between RMB 47,800-48,400/mt, and physical copper in China is expected to be offered at premiums of RMB 380-520/mt.
 

LME copper
SHFE night trading

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