LME Copper to See Choppy Trading Next Week, SMM Expects

SHANGHAI, Sep. 30 (SMM) – LME copper will experience choppy trading during the Chinese National Day holiday, while SHFE copper will consolidate at highs after the holiday, SMM predicts. 

While the OPEC agreed to cut oil output, outlook for the agreement is clouded by violation records in history. Iran, Nigeria and Lybia are given the immunity from oil supply cut, and it is difficult to reach a consensus on market share among OPEC members. Crude oil supply will remain in surplus. Hence, oil price is not expected to make substantial rallies, and to mainly trade between $45-48/bbl.  

In Australia, its central bank will hold its interest rate meeting, and dovish comments by its head earlier indicated that there was no emergency for the country to cut its rate, and it would need more time for inflation to grow, lifting market appetite. If Australia makes no move in rate decision, the Australian dollar will strengthen, which will weigh on the dollar. 

For US presidential election in November, market appetite will grow gradually, and its currency will be also affected. In the coming week, the dollar index is expected to trade between 94.5-96.5. 

LME copper should continue fluctuating wildly between $4,740-4,880/tonne during the holiday. SHFE 1612 copper contract should consolidate between 37,000-38,000 yuan/tonne after the holiday.    

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