Singapore, November 15 news: The three-month copper contract price on the London Metal Exchange fell 28 US dollars on Asian markets on Tuesday because investors made profits, but traders said that market prices may rise further because of rumors that China Hold a lot of shorts.
Traders are concerned about news that a trader at the National Reserve Bank of China may hold a large number of short positions on the London Metal Exchange.
However, a senior national reserve bureau official said that it does not have such short evidence. If these short positions do exist, they should also be in the trader’s own account.
LME declined to comment on these short positions, traders expect these short positions may be between 150,000 tons -200 tons, more than double the total LME inventory.
Peter Richardson, metal analyst at Deutsche Bank, said: “In this context, I think that the current market atmosphere will be tight, not just the current price level, but also because of the speculative behavior of China's State Bureau of Materials Reserves. Say the market is well supported.â€
Traders also said that the price of the three-month copper contract on the London Metal Exchange reached a record high of US$4,132/t on Monday, and the market may have a slight respite. It may not be difficult to reach a level of US$4,200 this week.
In early trading, LME three-month copper fell to 4,100 US dollars / ton -4,110 US dollars / ton, on Monday, the London market to close at 4,128 US dollars. Before the end of the trading period on Monday, the market price reached a record high of 4,132 US dollars due to large purchases of funds.
A Tokyo dealer said: "So far all fundamentals point to a strong market, and a large number of speculators have basically flooded the market."
In addition to the position of China's State Reserve Bureau, other fundamental news may also support prices in the short term.
Richardson said: “LME inventories are also a support factor at low levels. We think the price will continue to be strong this quarter and the next two quarters, which will surprise the market.â€
The National Reserve Bureau of China plans to auction 20,000 tons of copper on Wednesday, but traders suspect that the sale will have an impact on prices.
Speculators are pushing up world prices and this year copper prices have risen more than 30% to record highs.
The Shanghai copper contract price in January of the previous month fell by 190 yuan to 37,340 yuan/ton from the settlement price in the previous trading day on Tuesday.
On Tuesday, the US dollar/euro was close to a two-year high and the dollar/yen touched a 27-month high.
A Japanese trader said: “We have received less impact from the foreign exchange market in recent days. There are many factors supporting the strengthening of copper prices in the market.â€
For other metals, LME three-month aluminum fell to 2,048 US dollars / ton -2,052 US dollars / ton, to close at 2,051 US dollars in London on Monday.
LME three-month nickel reported at 11,800 US dollars / ton - 11,900 US dollars / ton; three-month zinc reported 1,598 US dollars / ton -1,603 US dollars / ton; three-month tin reported 6,,200 US dollars / ton - 6,250 US dollars / ton; Month lead report at 969 US dollars / ton -974 US dollars / ton.
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