SMM Copper Market Morning Review (2015-1-13)

SHANGHAI, Jan. 13 (SMM) – LME copper prices once dropped to USD 5,966/mt on Monday, the lowest since October 2009, and closed at USD 6,031/mt, down USD 73/mt.

Goldman Sachs cut its forecast for 2015 crude oil price to USD 47.15/bbl from USD 73.75/bbl. Besides, Saudi prince said crude oil prices will fall further should supply remain at current level and demand stay sluggish. Crude oil prices in the US slumped 4.7% to USD 46.07/bbl as a result. This has caused investors to shift to US Treasury bonds and gold for safety. Yields for the US 10-year Treasury bond dropped 6.2 basis points to 1.907%, a low never seen since May 2013. US shares fell across the board.

SHFE most-active copper contract opened at RMB 43,400/mt and tested a low of RMB 43,240/mt for Monday’s night session. The prices then stabilized at RMB 43,450/mt as some shorts closed positions and finished at RMB 43,510/mt, falling by RMB 630/mt. Trading volumes of the most active contract were around 180,000 lots, and positions fell by 4.770.

SHFE 1503 copper contract may trade at RMB 43,200-43,600/mt on January 13. Spot copper will be quoted at discounts of RMB 100-200/mt to SHFE 1501 copper contract.