33% of major Chinese copper plate, sheet, strip, and foil producers expected copper prices to hold steady in the near term, SMM’s latest survey of 21 producers showed. 

Over one third of these producers believed LME copper prices would hover at $7,100 per tonne. Light trading in copper market and cash squeeze by the year’s end would prevent copper prices from rising further, while limited short selling at highs was unlikely to cause a steep decline. Moreover, although SHFE copper stocks kept falling, spot market experienced slight contango before the delivery date. But south China outperformed other markets, with backwardation holding up high and trading inventories for copper at low levels. In overseas market, players might book profits ahead of the Christmas. In this context, neither futures nor spot prices would show any significant changes in the near term.

19% of enterprises were bearish, predicting a fall in LME copper to $7,000 per tonne. In China’s domestic markets, copper trade was subdued after prices climbed above 51,000 yuan per tonne. Scrap copper suppliers who had been reluctant to sell earlier also increased supplies following the copper price rebounds and due to growing financial pressure. Scrap copper prices were thus weighed down, lending little support to refined copper prices. The low SHFE/LME copper price ratio would also add to drag on copper prices.

10% of producers believed LME copper prices would rise to $7,300 a tonne. Copper stocks in bonded area and SHFE warehouses did not grow sharply despite record high imports and output, suggesting robust demand in the copper market. Although some argued that invisible inventories (unreported inventories) were behind the limited stock declines, the fact that spot copper market presented stronger momentum than the same period over the past few years and showed no sign of any huge contango was undeniable. As a result, a few producers held that tight spot supply in several regions might help with a recent price rebound. In addition, as market predicted that the Fed would not start slowing QE in December, investors might re-enter the metals markets after the Fed announced its decision.

The remaining 38% of respondents saw no clear clue for copper prices outlook.

As for order books in December, 95% of producers surveyed by SMM expected orders to remain stable, as strong demand downstream might not sustain following the restocking in November. Some producers would keep output stable and only stockpile intermediate and finished products according to needs of downstream consumers, so as to control costs and address cash strains by the year’s end. 

5% of copper plate, sheet, strip and foil makers saw decline in orders this month. Most of these producers mainly supplied goods to export-oriented enterprises, and expected waning demand overseas during the Christmas holiday.