SHANGHAI, Sept. 21 (SMM) – LME copper immediately lurched down after the open of European and US trading hours due to worries about soft global economy growth, igniting by the unchanged US interest rate. LME copper finally ended at a session low of USD 5,233/mt, slumping USD 162/mt or 3%.
SHFE 1511 copper gapped lower at RMB 40,370/mt last Friday evening responding to a slump in LME copper and then found support at RMB 40,000/mt. Later, the contract moved around RMB 40,100/mt before ending at RMB 40,170/mt, down by RMB 750/mt.
A delay in US interest rate hike gave no support to market and the reasons for the rate delay depressed commodity prices. US dollar index swung wildly following the unchanged US rate and finally returned above 95. Crude oil prices fell near 4%, weighing down base metals. Those factors fuel risk aversion in market.
LME copper should move at lows in USD 5,200-5,240/mt during Asian trading hours. SHFE 1511 copper will range between RMB 40,000-40,500/mt on Sept. 21. In China’s spot market, traders will ship hedged goods to market with a tumble in SHFE copper prices. Also, cash-hunger smelters will be eager to sell late Sept. and Q3. Thus, spot premiums will gradually narrow. Spot copper will trade between discounts of RMB 30/mt and premiums of RMB 10/mt.