Copper surges as China resumes buying after new year holiday
Source: AFX
metalsplace.com
Fri, Feb 23 2007, 15:19 GMT – Copper rose to its highest level since early January, as Chinese buying picked up at the end of the week-long Lunar New Year holiday in China.
China will resume normal trading conditions on Monday.
At 2.47 pm, LME copper for three-month delivery was up at 6,315 usd a tonne having risen 345 usd to settle at 6,135 usd yesterday. Copper struck an intra-day high of 6,300 usd.
"We've had a good run of late and the setup is still bullish for copper," said Niall O'Connor, technical analyst at JP Morgan. "What is significant is that over the last seven days copper prices have extended above key resistance levels."
Copper edged up despite a daily rise in stocks of 1,950 tonnes stored in LME warehouses, bringing the total to 212,375 tonnes. Despite the increase inventories are relatively low, especially amid a high number of cancelled warrants.
Cancelled warrants represent pledges to take delivery of the metal.
In the background, China's robust economy continues to underpin prices as demand is expected to remain strong.
All other base metals, apart from tin, also rose.
Tin had been rising as the Indonesian government cracked down on illegal tin mining, shutting down several operations last week.
After hitting a fresh contract high of 13,950 usd yesterday, tin fell "perhaps on news that PT Timah (key Indonesian tin producer) was officially granted an export license from the authorities," said Man Financial analyst, Ed Meir.
"The weakness (in tin prices) should prove short-lived, as we had no reason to suspect that the Timah would not have been granted export permission," added Meir.
LME tin for three-month delivery was down at 13,300 usd a tonne, having settled at 13,650 usd yesterday.
In other metals, aluminium was up at 2,848 usd having settled at 2,795 usd yesterday. Lead was up at 1,925 usd against 1,880 usd, while nickel was up at 39,950 usd against 38,900 usd at yesterday's close.
Zinc was also up at 3,590 usd from 3,481 usd seen at yesterday's close.
"The big test today, especially with it being Friday, is whether the metals can hold on to their gains," said BaseMetals.Com analyst, William Adams. "If they can then, prices will be well placed for next week and the return of the Chinese." |
