Copper Rises to Record in Shanghai: World's Biggest Mover
2005-07-25 03:25 (New York)
By Helen Yuan
July 25 (Bloomberg) -- Copper rose 3.1 percent to a record
in Shanghai, the biggest fluctuation of any commodity today, on
concern demand from wire and cable makers will outpace supply in
China, the biggest consumer.
London and New York copper prices gained to their highest in
at least 16 years. The price increased after UBS AG, the world's
biggest asset manager, said in a July 22 report that global
consumption will outstrip supply this year and on speculation the
stronger yuan will encourage imports by China.
Copper for delivery in September rose 1,020 yuan to 34,380
yuan a metric ton on the Shanghai Futures Exchange, the biggest
gain in percentage terms in more than a month.
``Demand from Chinese processors will pick up in late August
as the summer season ends,'' said Gu Yuan, a trader at Shenzhen
Star Futures Co., in a telephone interview. ``It will worsen the
supply deficit and the price will go up more.''
Chinese copper imports rose 55 percent in June from a year
earlier to 143,467 tons, according to figures today from the
Beijing-based customs office. Imports in the first six months
rose 2.8 percent to 721,050 tons, it said.
China's economy grew 9.5 percent in the second quarter from
a year earlier, the National Bureau of Statistics said on July
20, beating the median 9.2 percent gain forecast in a Bloomberg
survey. Fixed-asset investment increased 25.4 percent to 3.29
trillion yuan in the first half after climbing 22.8 percent in
the first quarter, the bureau said.
The expansion, the fastest of any major economy, has fueled
demand for wires and cables to carry electricity to homes and
factories in cities and rural areas.
Bets Reversed
Price gains in Shanghai prompted Chinese traders to reverse
bets that futures would fall following the revaluation of the
yuan, and this buying further boosted futures.
``Many short sellers, who increased positions last week
betting the yuan revaluation would push down prices, covered
positions today,'' said Wang Zheng, analyst at Dalu Futures Co.
Open positions for the August contract, or positions that
had not been closed, liquidated or delivered, fell by 2,028 lots
in the morning session. Open positions in the September contract
declined by 4,028 lots, said Wang.
The yuan rose 2.1 percent after China abandoned its currency
peg versus the dollar on July 21.
Copper futures for September rose 1.45 cents, or 0.9
percent, to $1.6180 a pound in electronic trading on the Comex
division of the New York Mercantile Exchange at 2:55 p.m.
Shanghai time. On the London Metal Exchange, metal for delivery
in three months rose $21, or 0.6 percent, to $3,467 a ton.
Speculators
Hedge-fund managers and other large speculators increased
their net-long position in New York copper futures in the week
ended July 19, according to U.S. Commodity Futures Trading
Commission data.
Speculative long positions, or bets prices will rise,
outnumbered short positions by 16,877 contracts on the Comex
division of the New York Mercantile Exchange, the Washington-
based commission said in its Commitments of Traders report.
A futures contract is an obligation to buy or sell a
commodity at a set price for delivery by a specific date.
The world's biggest movers are based on changes in price or
yield and are screened for the size of the market and amount of
daily trading.
--Editor: Poole. |
