Nearly 60% Copper Rod & Wire Companies Neutral about Future Copper Price

How about the trend of copper price recently?According to the survey result of Shanghai Metals Market, amongst 21 domestic copper rod & wire companies, 57% of the companies are neutral about the future copper price, while 14% and 19% of the companies consider that the copper price will rise and drop respectively.As for recent tendency of copper price, companies that are neutral about the copper price deem that the copper price will continue to maintain the trend with fluctuations before the end of the year, and there are huge pressures above RMB 60,000/ton domestically and USD 8,000/ton overseas. In the EU meeting that was closed last week, though most countries agreed to draft a new treaty to deepen economic integration in Euro area, Britain, as a key member,did not agree with the plan, indicating that there is still a long way ahead for all members of the European Union to reach a consensus on fiscal policy and debt relief program and to find substantial solutions, thus the copper price will continue to be suppressed. Meanwhile, China’s reduction of deposit reserve ratio and western countries’ maintenance of low interest rate are the foremost supports at present.

19% companies consider that the copper price will drop. The EU meeting held last week brought little good news to the market. Moreover, the current copper consumption will become weaker and backwardation will plummet,indicating that the copper price above RMB 58,000/ton is not accepted in the market.Therefore, it is likely for copper price to plummet to RMB 52,000/ton.

14% companies consider cautiously that the copper price will rise. However, the current outflow of hot money provides China’s central bank with an opportunity to reduce deposit reserve ratio again. The European Central Bank has lowered its interest rate and the overall capital quantity is relatively sufficient. Therefore, copper price is likely to rise before the end of the year. It is noticeable that, such enterprises also consider that great pressure exists above RMB 60,000/ton.

10% of the companies indicate that it is hard to judge the future copper price.