SHANGHAI, Aug. 14 (SMM) – Poor lending and investment data were reported from China on August 13, and the US retail sales for July also hit a six-month low, igniting concerns over metal demand. Base metal prices on both London Metal Exchange (LME) and Shanghai Futures Exchange (SHFE) slumped in the wake of the disappointing figures.
LME three-month copper fell below $6,900 per tonne and closed Wednesday at $6,885 per tonne, losing over 1%. The most active October copper contract on SHFE ended lower for the morning session today, losing 1.13% to end at 48,950 yuan per tonne. Will copper prices fall further or stage a rebound after the plummet against negative news? Opinions were mixed among Chinese analysts.
Most analysts interviewed by Shanghai Metals Market (SMM) expected copper prices to dip lower, citing worsening short-term technical indicators and weakening demand, as well as the resumption of copper concentrate exports from Indonesia.
“The tumbling lending data and slower-than-expected housing investment growth caused investors to worry that the downturn in property market will exert a drag on China’s growth and impair demand for industrial metals”, an analysts from Guotai Junan Futures told SMM. “On the technical side,” he added, “the October-delivery SHFE copper may find support at 48,500-49,000 yuan a tonne, with resistance at 49,500 yuan per tonne”.
A few others, however, see bigger chance that copper prices will bounce back, noting that the weekly chart for SHFE copper prices is still showing positive signs and the solid support has formed at 49,600 yuan per tonne.
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