SHANGHAI, Jun. 21 (SMM) – SMM survey indicates that 24% Chinese copper smelters see LME copper to break through USD 4,620/mt this week and SHFE 1608 copper to break through RMB 35,700/mt. 

Commodity prices grew across the board on Monday, and this will boost base metal prices. LME copper stocks dropped for 7 days in a row, down by 19,200 mt with canceled warrants up to 21.93%. This means that copper stocks will continue falling. SHFE copper stocks fell 16,233 mt to 166,105 mt, approaching the lowest posted on December 31 last year. Spot copper remains large premiums after the delivery of SHFE 1606 copper, at RMB 80-120/mt on Monday, a reflection of active trading. Expectation for rate hike weakens a lot, weighing on US dollar. Technical side is positive for SHFE copper. As such, copper prices should see upward momentum this week.

52% industrial insiders expect copper prices to move at current levels this week with LME copper between USD 4,550-4,630/mt and SHFE 1608 copper at RMB 35,100-35,700/mt. The latest polls show that British people supporting to remain in EU is more than those supporting to leave. US dollar will thus swing widely this week. The number of oil drilling platform in the US grew 9 in the week ending June 17, rising for 3 weeks in a row. This will depress crude oil prices. The PBOC maintains steady capital measures and expanded the reverse repos after a large number of liquids came due on Monday. Price gap between SHFE 1607 and 1608 narrows to RMB 30/mt at present, which curbs speculative activities in market.

24% industrial insiders predict that LME copper will fall below USD 4,550/mt this week and SHFE 1608 copper will drop below RMB 35,100/mt. Higher TCs boost smelters’ producing interest and supply & demand imbalance will be worsened by the coming low-demand season. Copper consumption at copper processors post falls in June. Major air-conditioner manufacturers cut planned production for June, including 15%, 11% and 17% cuts respectively by GREE, Midea and Haier. And operating rates at domestic copper processors will drop 2 percentage points in June. US housing starts and building permits released recently are positive and this may bolster US dollar. As of the week ending June 14, net short positions on Comex copper market was 44,811, up 5,517 on the weekly basis with shorts up 4,334 and longs down 1,183.