SHANGHAI, Oct. 9 (SMM)－During the first trading day after the National Day holiday, with good news as PBoC’s targeted cuts to required reserve ratios and rise of most metals in foreign markets, SHFE metals see a good start today. With strength of red marubozu on the last trading day before the holiday continued, SHFE Copper once rushed high after started high during the morning session. Despite slight retracement at this moment, the rise amount is still evident. Is SHFE Copper expected to rise again in short term?
Xu Maili, Chief Research Officer of Guangda Metals thinks copper prices is expected to remain strong in short term with little risk of retracement except being driven by nearby markets. But the price still need to be treated as a rebound in midterm.
Luo Liang, from Shanghai CIFCO Futures said the rise of SHFE copper today is more like a complementary rise after rise of LME copper price. According to the market structure, the structure of price difference is becoming flat and the bulls are not so strong in market. For foreign market, the rise amount of LME copper is getting slow. Discount of spot copper has reached $50 per tonne, which will form a pressure on futures price. Hence the rise amount will not be sustainable except new good information appears.
Zhang Huawei, from Dongwu Futures: The global manufacturing industry is still in expansion. With rising inflationary pressure, domestic economy remains overall stable and the downward space of copper price is limited. But since Sept.22nd, the country launched a new round of real estate control since Sept.30th last year. The driving effect of real estate market and infrastructure investment on copper consumption becomes weakened. With grim environmental protection outlook in China, after the high prices of various industrial products in past 4 years driven by supply-side reform and DE-capacity previously, the market shifts its focus to demand side since the downstream enterprises and end-consumers reduce production with the pressure of environmental protection. FED announced to shrink its balance sheets from October and Standard & Poor's lowers China’s sovereign credit ratings, which frustrates market’s confidence and raises hedging emotions. As per the copper fundamentals, the effect of continuous supply breakoff during the first half of the year is weakened and supply of mines is increasing in recovery. TC of copper concentrates continues to rise. Demand side is expected to drop with shrinkage of real estate market and drop of growth of grid investment. The copper price lacks sustainable power to promote its rise in short term but the support below is quite firm, so it will probably be volatile at high points.
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