SHANGHAI, Sept. 16 (SMM) – LME copper tested support at USD 5,250/mt overnight as market still digested the news of a slump in Chinese stock market. But during European and US trading hours, LME copper bounced backed and regained earlier losses due to short covering and year-on-year growth in China’s August social power consumption. LME copper finally closed at USD 5,332/mt, up by USD 39/mt.
SHFE 1511 copper opened slightly lower at RMB 40,390/mt during Tuesday evening session and then drifted higher to RMB 40,770/mt responding to LME copper and crude oil prices. The contract ended RMB 210/mt higher at RMB 40,720/mt. Positions increased 2,996 to 203,996 with trading volumes around 260,000 lots.
The decline in US crude oil inventories surpassed expectation, driving crude oil prices up. This supports commodity prices. But US Fed will announce the decision on interest rate raise on Friday, Beijing time. Before this, risk of rate hike still depresses market, limiting the growth in base metal prices.
LME copper is likely to move in USD 5,280-5,380/mt during Asian trading hours. SHFE 1511 copper may hover between RMB 40,300-40,800/mt on Sept. 16 following Tuesday evening’s growth. Spot copper in China should trade between discounts of RMB 50/mt and premiums of RMB 30/mt as cargo holders are eager to hold prices firm after the delivery for SHFE 1509 copper.