SHANGHAI, Jun. 10 (SMM) – In China last week, the Shanghai Composite Index lost 0.8% and SHFE copper prices followed LME copper down. The SHFE/LME copper price ratio recovered to 7.12 as SHFE 1408 copper contract prices pared some losses after moving to RMB 48,000/mt. Technical indicators for SHFE copper were also negative. Traded volumes for SHFE copper contracts were down by 450,000 lots last week, with positions falling by over 10,000 lots as well. SHFE copper prices may move lower to RMB 47,000-47,300/mt.

China’s bonded zones were negatively affected after Qingdao launched a probe into loan irregularities involving port stocks. Several foreign banks, including Standard Chartered, have reportedly suspended new metal financing to some customers in China, which may cause imported copper to flood into China’s domestic markets, resulting in significant surpluses. Meanwhile, copper demand should weaken in June. Spot premiums are also likely to narrow before the delivery date, accelerating price declines.