Metals - Copper hits high on strong Chinese imports, nickel touches new high
04.10.07, 7:19 AM ET
forbes.com
LONDON (Thomson Financial) - Copper surged to a seven-month high as China reported high imports, and after the LME reported a fall in stocks.
Demand from China, the world's biggest copper consumer, rose 58 pct year-on-year in the first three months of 2007, reported the Chinese customs office today. Imports in March alone were up 61 pct from the same month last year.
Further, stocks stored in LME certified warehouses across the globe fell 1,375 tonnes to 177,600 tonnes, said the LME in a daily report.
'The buying has been boosted by hefty Chinese imports,' said BaseMetals.Com analyst, William Adams. 'This once again suggests that the picture was distorted earlier in the year by reports that China's apparent consumption was falling, when indeed it was just destocking,' he added.
At 11.00 am copper for three-month delivery stood at 7,740 usd, against 7,340 usd at the close on Thursday. Prices had struck an intra day high of 7,899 usd earlier in the session.
Rising copper prices are pulling all metals higher, noted JP Morgan metals strategist, Michael Jansen. He believes the 8,000 usd level may be reached in the short term.
However, Jansen added high imports in the first quarter of 2007 into China is unlikely to be repeated in the second quarter. 'Chinese demand is price sensitive and towards 8000 usd is likely to see significantly reduced physical activity,' he said.
The base metals also benefited from strong US employment data released Friday. Sentiment is being boosted on the news which is 'removing some of the dark clouds hanging over the US economy,' said Sucden analyst, Michael Davies.
Nickel struck a new all time high of 51,150 usd, following copper's lead and underpinned by another fall in LME inventories. Stocks fell 180 tonnes to 4,632 tonnes on the day, reported the LME today.
Stocks of the metal are so low that current volumes available to the market would not be enough to satisfy one day's worth of global consumption.
Nickel was at 49,750 usd from 49,400 usd at the close on Thursday.
'Today is likely to see volatile trading as traders adjust their positions following such a strong move over the Easter holiday, but with the copper spread drifting again it suggests there is some profit-taking going on,' said Adams at BaseMetals.Com. 'At these heights it would not be surprising to see some significant pull back, although dips are likely to be well supported.'
In other metals, zinc was up at 3,580 usd against 3,435 usd, lead was up at 2,045 usd against 1,990 usd, aluminium was also up at 2,922 usd against 2,840 usd. Tin rose to 14,400 usd against 14,000 usd at Thursday's close. |
