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Will Copper Prices Rise after US Fed’s Rate Hike? SMM Interviews

SMM Insight 03:31PM Mar 16, 2017 Source:SMM

SHANGHAI, Mar. 16 (SMM) – US Federal Reserve announced to raise benchmark interest rate by 25 basis points after its March meeting. The dollar, however, tumbled to around 100 following dovish comments by Fed’s chairwomen after the meeting. LME base metals mostly strengthened after the rate decision, with LME copper finishing up 0.91 percent at $5,888 per tonne. 

Will copper market have further rising room in the short term?

Sources: Glencore Sells Indonesian Nickel Ore

One analyst from Soochow Futures said copper market will mainly seek direction from China’s demand and the development of strike at several major copper mines.

"Utilization rates at copper downstream producers in China are positive, according to SMM data, and meanwhile, a three-year high in China’s rebar futures market also boosts market sentiment, in addition to supply disruption at several large mines," said the analyst, boding well for copper market. 

Another chief advisor at one assets management company told SMM that market had digested the negative impact in advance from US Fed’s rate hike, which fell within market expectation, and the dollar is not estimated to advance in the medium and long run, as Trump earlier expressed that a strong dollar would hit US’s economy. 

"SHFE copper is expected to trade between 46,000-52,000 yuan per tonne, and buying is advised when the price is between 46,000-47,000 yuan per tonne, and selling when price is at 49,000 yuan per tonne," the advisor added.  

A director from Everbright Futures said copper market fundamentals will improve in late March-early April, and this will support copper prices, and main risks will mainly come from the commodity market, policy and covering by longs. 

"Buying is advised at lows in late March due to the release of pressure from covering by longs and digestion of US rate hike, and copper prices will lurch higher with demand improving," he added. 

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