What Allows SHFE Copper to Hold Firmer than LME Copper? SMM Interviews

SHANGHAI, Jan. 12 (SMM) – Copper prices on the Shanghai Futures Exchange fell more slowly than London Metal Exchange copper at the beginning of 2015. What allowed SHFE copper to outperform LME copper? Will this trend continue against weak PPI and CPI data and spot copper discounts in China?

“A weakening Chinese yuan contributed largely to a firmer SHFE copper,” an analyst from Minmetals Futures interviewed by SMM said, “this, however, means LME and COMEX copper have given a much truer picture of supply and demand dynamics in copper market.”

Analyst from Nanzheng Futures who agreed with the opinion added that swirling rumors about copper purchases by China’s State Reserve Bureau also lent some support to SHFE copper.

With respect to the depressed CPI and PPI data, most analysts interviewed by SMM said the results are within market expectations and are unlikely to have significant impact on copper prices.

Nevertheless, an analyst with Baocheng Futures expressed concerns over the growing SHFE copper inventories and wider spot discounts in China’s copper markets, pointing out that SHFE copper will be less resistant to declines should spot market remain sluggish and SHFE copper stocks rise further.  
 

The article is edited by SMM and is provided for information purpose only. SMM assumes no liability and does not warrant the accuracy, reliability or completeness of information contained or quoted in the article, either express or implied. SMM further disclaims any liability for losses in connection with the information contained or quoted in the article.

For news cooperation, please contact us by email: sallyzhang@smm.cn or service.en@smm.cn.