Reuters reported that Shanghai copper edged lower and is expected to move in a narrow range under pressure of the spot market, despite support from a weaker US dollar and steady oil prices.
Shanghai’s benchmark 3rd month copper futures contract fell 0.6% to CNY 50,830 per tonne by 0225 GMT despite 1.7% rise in London copper in the previous session. 3 month copper futures contracts on the London Metal Exchange shed USD 20 per tonne to USD 6,550 per tonne.
Mr Lin Yuhui deputy GM of Jinhui Futures said that “I don’t expect copper prices to go down much, exactly because those markets are being supportive. Even though copper is bullish in medium and long term, the pace of ascent needs some adjustment. Prices would either be range bound for a while to consolidate or move down before rising higher.”
Pressure on the dollar pushed it towards multi month lows versus a basket of currencies after the US Federal Reserve kept interest rates unchanged near zero, even as it expressed confidence in the US economy. US crude futures hovered around the USD 80 level where they had closed a day earlier after US crude inventories showed an unexpected decline.
Investors are eyeing monthly US employment data due Friday. Forecasts call for the unemployment rate to edge up to 9.9% in October from 9.8% in September; non farm payrolls are expected to fall by 175,000 in October after a decline of 263,000 in September.
Mr Li Rong an analyst at Great Wall Futures said that “The abundant spot supply is weighing down on prices but bullish sentiment has not disappeared. Price movement is stuck in these 2 forces. There is very little going on, as reflected in the shrinking trading activity in the market.”
A Shanghai based trader said that “Shanghai is obviously dragging down London today. The bullish sentiment in China is not as strong as in London. China’s end consumers and people with import contracts are not willing to buy at the current price levels. There is not a clear direction in the market; therefore prices won’t fluctuate too much.
(Sourced from Reuters)
