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Weaker US Dollar Helps Copper Prices Break Through 70,000 yuan/mt

iconApr 18, 2023 09:22
Source:SMM
The US dollar weakened remarkably last week due to market expectations over Fed interest rate cuts at the end of the year.

The US dollar weakened remarkably last week due to market expectations over Fed interest rate cuts at the end of the year.

This pushed copper prices to rise and break through 70,000 yuan/mt approaching the weekend.

Fundamentally, due to the relatively loose supply of copper scrap, the supply of copper cathode has not yet tightened. And the recovery of domestic consumption is slow. Hence the rate of destocking has slowed down, and copper prices lack momentum.

In the future, it is necessary to continue to pay attention to the economic data of the United States and Europe. If the economic data continue to weaken, risk aversion will heat up, putting pressure on the prices of risky assets such as copper. The most active SHFE copper contract prices are expected to move between 68,500-71,000/mt this week, and LME copper will trade between $8,850-9,200/mt.

In the spot market, the backwardation of the SHFE front-month copper contract over the SHFE next-month copper contract remained at around 100 yuan/mt last week. After the delivery of the former this week, the spot quotes will fluctuate around the price spread between the two contracts. High copper prices will weigh on spot quotes and the spot premiums are expected to stand at 30-100 yuan/mt.


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