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SMM Base Metals Weekly Price Review and Forecast (Dec. 8-12, 2014)

Release time:2014-12-09

Dec 09, 2014 01:38 GMT   Source:SMM

 

SHANGHAI, Dec. 9 (SMM) –Base metals plunged in the week ending December 5, triggered by tumbling crude and gold prices, as well as sharply rising US dollar index. For example, LME copper lost as much as 5% last Monday, and the most active SHFE copper contract shed a staggering 6%. Base metals prices followed crude oil up later in the week. But the rally was driven by short sellers existing, rather than by long buyers entering. In China’s spot base metals market, prices recovered some losses later in the week. SMMI declined 0.21%. Processors jumped in after copper prices stopped falling, keeping spot premiums stable. SMMI.Cu inched down 0.39%. Lead and zinc supply in China was plentiful, and bearish sentiment dominated, sending SMMI.Pb and SMMI.Zn down 0.52%. Eagerness to sell and weak demand dragged tin prices in China down, with SMMI.Sn down 0.92%. Aluminum led losses among base metals, with SMMI.Al losing 1.05%. Nickel was the outlier among base metals. LME nickel gained 5.97%, while SMMI.Ni rose 5.74%.    Copper  SHFE copper prices followed LME copper down at the beginning of last week, falling by its daily limit to RMB 43,890/mt to present a 6% loss. However, the prices then bounced back to RMB 46,000/mt aided by rebounding LME copper and surging Chinese stocks. Trading volumes soared, and activities during night session reduced in the latter half of the week. Positions increased by over 80,000 lots early last week, but total holdings grew only 110,000 lots during the whole week.   SMM expects SHFE copper to trade at RMB 45,200-46,800/mt this week.   Copper market presented sharp swings last week, and hedged goods flooded into spot market after copper prices declined. Bearishness dominated the market, imposing a ceiling on any rise in spot premiums.   Downstream buyers increased purchases after the decline in copper prices was arrested. However, market turn......