SHANGHAI, Jan. 5 (SMM) – It was heard that nine major Chinese copper smelters agreed to slash spot sales during the first quarter of 2016. Will the cut support spot copper prices?
Spot supply will be reduced by around 200,000 tonnes in Q1, said a senior official from one anonymous domestic copper smelter, which is equivalent to 10 percent of China’s copper output in the quarter.
“The joint supply cut will support spot prices, and market sentiment will also likely improve, but the positive impact will be short-lived,” said an analyst from Chaos Ternary Futures.
Another analyst from Guotai Junan Futures agreed, and also expressed his worries on large inflows of imported copper.
“A large volume of imported resources are expected to arrive in domestic market due to the favorable price ratio and expectations on Chinese yuan’s further devaluation,” he observed, which will undermine price support from the supply cut.
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