SHANGHAI, Oct. 21 (SMM) – 37% of Chinese wire & cable producers are bearish towards copper prices in the short term, citing growing oversupply pressure, the latest SMM survey of 21 producers reveals.
These producers also note that China’s PPI, CPI and electricity consumption all indicated weak demand from China. M2 growth in September fell short of forecast, meaning liquidity conditions were not as good as market had anticipated. These factors will combine to drive down copper prices.
29% of the respondents expect copper prices to remain in current range, arguing that the low copper inventories reported by both LME and SHFE will limit downward room for prices. Moreover, a loosening of China’s property curb will also shore up market confidence. However, these producers admit the fact that the US dollar will remain strong given growing anticipation of the Fed’s interest rate hike, which will place pressure on copper prices.
Only 5% of these producers are upbeat, as they believe local government will step up their efforts in maintaining stable economic growth in the last quarter, which will have a buoyant effect on copper demand. Besides, copper prices are expected to bounce back after recent sharp falls.
The remaining 29% of producers are not sure about copper price outlook.
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