SHANGHAI, Sept. 2 (SMM) – 33% of Chinese copper wire and cable producers expect copper prices to fall in the near term, the most recent SMM survey reveals.
These respondents argued that the People’s Bank of China’s targeted interest rate cut is launched to support agriculture and unlikely to benefit industrial enterprises and large investment projects.
Anemic demand and tight finances are also believed to prevent copper prices from rising. Thus, these producers expect copper prices to test a low of $6,800 per tonne.
24% of the surveyed see copper prices to hover near $7,000 per tonne, citing the historic low copper stocks reported by SHFE and LME. Moreover, these enterprises predict the Chinese government will introduce further stimulus in H2. Both factors will limit decline in copper prices.
One tenth of these producers remain bullish, holding that copper prices will test resistance at $7,200 per tonne. Prices did not show noticeable decline in July and August when demand was the weakest, a sign that support at lower price levels was solid. Expectations for improving consumption in September and low copper stocks may also proffer upward momentum for copper prices.
The remaining 33% of producers see no clear direction for copper prices.
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