SHANGHAI, Aug. 6 (SMM) – Copper prices have been falling during this slack season. However, the August-delivery SHFE copper managed bounce back once touching 38,000 yuan per tonne, whereas LME copper hit new low. What has allowed the 1508 copper contract to hold above 38,000 yuan?
SMM reckons that buying activities in physical market is among the major reasons. SMM understood that more downstream buyers started entering the market to source goods when futures prices approached 38,000 yuan, lending support to SHFE copper.
Moreover, cautious shorts opted to exit the market when the August SHFE copper came near 38,000 yuan, which was reflected by noticeable decline in short positions.
“The price has followed the downward track for some time and is now technically near the bottom of this downtrend channel, and some short investors hold that price is likely to rebound once nearing this level,” SMM team says, ”that may explain the decline in short positions.
Total SHFE copper positions stayed above 760,000 by August 6. With such high positions, SMM predicts that SHFE copper may hover near 38,000 yuan per tonne on the horizon.
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