SHANGHAI, Jan. 13 (SMM) – 47% of Chinese copper wire & cable producers paint a dismal picture of short-term copper price outlook, citing a slew of negative factors, SMM's most recent survey of 21 producers indicates.
Crude oil prices have fallen below $50 per barrel. The US dollar index climbed to 92, driven by fear of Greece exit from the euro zone, deflationary pressure in the euro zone, as well as strong US economic recovery. Technically, both LME and SHFE copper are under great downward pressures.
19% of them expect copper prices to consolidate. Both US shares and US dollar index dropped at the beginning of this week, keeping copper prices in check. Improving SHFE/LME copper price ratio will see growing inflow of imported copper into the Chinese market, pressuring copper prices. That said, rising Yangshan copper premium will limit any downside potential of copper prices.
Another 5% see a rally in copper prices. Chinese A-share market has hit multi-year high, and is poised for more gains. In China’s spot copper market, smelters are loath to sell at lower prices, and processors went bargain hunting after the three-day holiday, which will fuel a rebound in copper prices.
The remaining 29% said they are not sure how copper prices will move.
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