Chinese Copper Plate/Sheet, Strip and Foil Makers Split Over Copper Price Movement

SHANGHAI, Aug. 26 (SMM) – 28% of Chinese copper plate/sheet, strip and foil producers see LME copper hovering near $7,000 per tonne this week, a recent SMM survey of 21 fabricators shows.

HSBC’s flash China manufacturing PMI hit a three-month low of 50.3 in August. However, downbeat PMI also raises hope that the Chinese government may introduce more stimulus measures, so as to achieve its 7.5% GDP growth target for this year. These potential pro-growth measures will then help limit any decline in copper prices.

29% are bearish that LME copper will retreat from $7,000 yuan per tonne. The Chinese government has introduced a series of pro-growth policies in the first half of the year, including targeted RRR cuts, loosening curbs on home purchases in some regions, cutting mortgage rate for first-home buyers and funding low-income housing construction. Some producers thus expect little room for more stimulus measures for the rest of the year. Moreover, bank lending to metal financing business remains tight and the potential rise in overseas capital costs will also dampen finance-driven copper business.

Still, 14% of polled by SMM are optimistic that LME copper will rise to challenge $7,200 a tonne. SHFE copper stocks, though up somewhat, remain well below the levels seen early this year. LME copper stocks are also near record lows. These conditions will favor copper prices in spot markets and create room for short squeeze.

The remaining 29% are not sure about copper price movement.  


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