SHANGHAI, Aug. 4 (SMM) – 57% of Chinese copper wire and cable manufacturers predict that copper prices will remain in the current range for the near term, the most recent SMM survey of 21 enterprises reveals.
Upbeat economic releases shored up market morale and turned players confident in economic growth in the latter half of the year. Strong momentum in aluminum, zinc, and lead markets also helped copper prices hold firm.
Nonetheless, rising copper stocks have left spot discounts in China’s copper markets, and copper consumption sagged as well during the low demand season. Moreover, enterprises have not yet enjoyed sweetener from China’s modest stimulus, and have thus been distressed by cash problem and limited orders. As a result, copper price still lack impetus to climb, and are expected to hover at 50,000 yuan per tonne.
24% of these producers expect copper prices to rise to 52,000 yuan per tonne, noting that US Commodity Futures Trading Commission has reported net long positions in Comex copper for a third week in a row. Furthermore, LME copper stocks were still on the way down, and the cash-to-three-month copper spread flipped into backwardation. These positive factors, combined with bright data both at home and abroad, lead some producers to believe copper prices will increase.
The remaining 19% see unclear outlook for copper prices.