SHANGHAI, Jun. 19 (SMM) – 70% of Chinese copper tube/pipe producers are bearish towards copper prices, noting that LME copper prices may not find solid support at $6,600 yuan per tonne and will possibly drop below this level, a recent SMM survey shows.
Qingdao’s investigation will be the major negative factor for copper prices lately. Banks both at home and abroad are cautious towards loans pledged by bonded warehouse warrants and restricting L/C issuance. The resultant outflow of bonded copper stocks ignited concerns over growing supply in China’s copper markets and rising LME copper stocks.
In addition, short positions in LME and SHFE copper also increased, and CFTC report indicates a biggest decline in net long positions in Comex copper in a month. These factors will combine to push down copper prices.
5% of these producers believe that LME three-month copper will consolidate around $6,600 yuan per tonne. The upbeat US economic data, including nonfarm payroll figures and jobless rate sent US stock prices up, which will lend some support to copper prices. However, the persistently high positions in SHFE copper still leave chances of short squeeze. The two factors are believed to leave copper prices in the current moving range.
25% of producers are not sure where copper prices are heading over the near term.