SHANGHAI, Dec. 22 (SMM) – SMM survey reveals that 54% Chinese industrial insiders expect LME copper to up to USD 4,680-4,750/mt this week and SHFE 1602 copper to break through RMB 36,100/mt.
The People’s Bank of China (PBOC) injected RMB 100 billion of liquidity at an interest rate of 3.25% via conducting 6-month medium-term lending facility last Friday and this week the PBOC will inject another RMB 30 billion into market. Besides, US Fed’s rate hike boosts expectation for PBOC’s interest rate and reserve requirement ratio cut.
See SMM Forecast, Please Click:LME Copper to See Greater Volatility Next Week
And investors believe that little downside room is in sight for copper prices in short term following continuous falls. Chinese copper producers will cut more capacity should they suffer losses. Moreover, net long positions of LME copper has headed for gains since December. Raw material purchase, operating rates and orders all pick up at domestic copper processors currently as copper prices hit a low and as producers ramp up production for year’s target. Technical indicators also show upside trend for copper prices.
38% market players note that LME copper will move between USD 4,600-4,680/mt this week and SHFE 1602 copper will range RMB 35,200-36,100/mt. Both shorts and longs exit market for pre-holiday risk aversion near year’s end with positions still above 770,000 on SHFE market. LME will be closed for the Christmas Day. Price offers diverge among China's cargo holders with some rushing to sell while some unwilling to sell. Sellers hold back sales at low while buyers refuse to buy at highs, leaving trading come to a standstill.
The rest 8% respondents see LME copper to drop to USD 4,550-4,600/mt this week and SHFE 1602 copper to slip to RMB 35,200/mt. China’s refined copper imports hit a new high of 358,700 mt in November since February 2014, up 11.99% YoY and 4.4% MoM. Growing spot supply expands spot discounts. Additionally, crude oil prices register losses recently due to oversupply. And more losses are in sight for crude prices this week, curbing copper prices.