SHANGHAI, Apr. 27 (SMM) – 32% of copper smelters in China remain optimistic about copper prices, expecting further fall in the US dollar index and China’s RRR cut to lend support to the red metal, SMM's survey of 22 smelters shows.
In addition, copper inventories in Guangdong have declined to 12,700 tonnes recently, allowing cargo holders to hold prices firm. That, combined with the peak demand season, will send spot premiums higher, in turn bolstering copper prices.
36% of smelters see copper price to stay in the current range, noting that China’s RRR cut had failed to boost Chinese shares, with bank stocks falling across the board last Monday. Furthermore, increasing investment in stock markets means players are withdrawing funds from futures markets, which will restrict futures trading. Therefore, these smelters believe “one-sided” trading is not expected in copper market.
9% of smelters see downside risk, citing relatively weak US shares and mixed data from the US. Moreover, net long positions in Comex copper have reportedly declined 1,125 to 14,295 for the week ending April 14, a sign that hedge funds are less bullish about copper market.
China’s copper production data reported lately grew noticeably, while imports fell short of forecast, which are also believed to drag down copper prices.
The remaining 23% see no clear direction in copper prices.
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