SMM Copper Market Morning Review (2015-10-21)

SHANGHAI, Oct. 21 (SMM) – LME copper opened at USD 5,203/mt on Tuesday and tested a low of USD 5,171/mt during Asian trading hours and later advanced to USD 5,243/mt, to end at USD 5,201/mt. Positions dropped 3,094 and LME copper stocks slumped 4,500 mt.

The speech of the ECB unlikely to expand QE program in short term boosted EUR and weighed down dollar. But dollar found support from US upbeat new home starts data. API report showed US crude oil inventories printed growth again, depressing crude oil prices.

SHFE 1512 copper started slightly higher at RMB 39,220/mt during Tuesday evening session and fell to RMB 39,100/mt. Later, the red metal once shot up to RMB 39,370/mt and closed at RMB 39,210/mt, up RMB 110/mt or 0.28%. Positions dropped 3,280 to 246,738 with trading volumes around 170,000 lots.

Expectation for more pro-growth measures in China, Chinese stock rally and falling dollar contributed to Tuesday evening’s base metal price gains.

Major reports are absent on Wednesday. LME copper should move in USD 5,170-5,230/mt during Asian trading hours. Shorts lack confidence and far month contracts suffer sell-offs in the SHFE market. Thus, SHFE 1512 copper will range between RMB 39,000-39,400/mt on October 21. Traders stay out of market in China and trading should remain soft. Spot copper should trade between discounts of RMB 50/mt and premiums of RMB 10/mt.