Copper prices to remain rangebound

SHANGHAI, Mar 22 (SMM)—Annualised sales of existing and new homes in the United States in February are due this week. The UK and other European regions will also release the CPI data in February and the flash value of the manufacturing PMI in March. Copper prices still have strong support from 65,300 yuan/mt and are unlikely to fall below this level in the short term.

Community roadblocks, truck strikes and COVID-19 infections have continued to weigh on spot TCs of copper concentrate and market sentiment. Finished product inventories at some domestic copper smelters did not decline sharply and inventory at copper rod plants using copper cathode as feedstock continued to accumulate. Market expectations failed over the peak season.

SHFE copper prices are expected to move between 65,300-67,300 yuan/mt this week, and LME copper prices are expected to move between $8,820-9,100/mt.

In the domestic spot market, trading activity remained relatively brisk on the back of downstream demand. Inventory is expected to trend lower as consumption improves. Spot trades are expected to pick up. Spot copper is expected to trade with discounts of 100-20 yuan/mt this week.

Copper prices plunged last week. The Fed announced that it would keep low interest rates unchanged and maintained a dovish stance at its interest rate meeting, allaying market concerns over less easy policy.

On fundamentals, the truck strike in Peru fuelled market concerns over copper concentrate supply. An over 10,000 mt increase in LME copper inventory weighed on LME copper prices. However, the high-level dialogue between China and the United States increased risk appetite, bolstering the US dollar index and pushed base metals prices lower.