SHANGHAI, Aug. 6 (SMM) – LME three-month copper closed down USD 90/mt at USD 7,050/mt on Tuesday. China’s service sector posted its slowest growth in nearly nine years, curbing risk appetite, but figures from the US were satisfactory. Data for the US service sector in July and factory orders for June both exceeded expectation, indicating stronger momentum for the US growth and fueling concerns that the Fed may raise interest rate in advance, allowing the US dollar to strengthen. Poland’s foreign minister Radoslaw Sikorski said Russia’s any move at the border of Ukraine will intensify the tension between the two countries, pushing down US stock prices.
As notable, LME issued its first report on long and short positioning for copper, aluminium and other base metals for higher transparency. The report shows each day's open interest over the previous five working days. Data on August 1 indicated fund managers held a net short position of 369 lots in copper, or 9,225 mt compared with the previous working day, while brokers and traders held a net short position of 934 lots. Producers and traders were holding 802 lots in net long positions in copper.
SHFE 1410 copper contract prices opened at RMB 50,160/mt during Tuesday’s night trading and hit a low of RMB 50,080/mt before closing at RMB 50,140/mt, down RMB 400/mt. Traded volumes for the most active SHFE copper contract rose to 110,000 lots, while positions grew by 5,808 lots.
On August 6, SHFE 1410 copper contract should trade at RMB 50,000-50,500/mt. Spot copper may be quoted at discounts of RMB 0-100/mt against SHFE 1408 copper contract prices.