Metals - Copper higher ahead of holidays, strike threat at key mine
04.30.07, 7:19 AM ET
forbes.com
LONDON (Thomson Financial) - Copper rose, following a strong session in Shanghai ahead of the Golden week holidays and as traders feared mine-workers might strike in Peru.
Trade from Asia will thin from Tuesday for a week, as China, the world's largest copper consumer, celebrates Golden Week. Japanese markets are closed today, Thursday and Friday.
'There is some buying of copper ahead of the week long shutdown in Chinas physical business,' noted JP Morgan analyst, Michael Jansen.
A relatively weak US currency and another drop in LME-certified stocks also helped underpin prices.
'Supply disruptions and threats have resurfaced at a time of declining concentrate stocks which has helped to tighten the market,' said UBS (nyse: UBS - news - people ) analysts.
Peru's largest miners' union rejected a last-minute government proposal to avert a nationwide strike, which began overnight.
Peru is the world's third largest copper producer.
Stocks of the red metal stored in LME stamped warehouses across the globe fell a hefty 1,925 tonnes to 157,200 tonnes, said the LME in a daily report.
At 10.54 am, LME copper for 3-month delivery was up at 7,752 usd a tonne against 7,745 usd at the close Friday.
Prices will likely fall in the third and fourth quarter of this year as refiners increase production, 'but the demand side remains robust and any major disruptions on the supply side will accordingly feed through into more robust copper prices accordingly,' said Jansen at JP Morgan.
Copper prices have lost 2.5 pct since last week, having spiked earlier after China reported a record level of imports.
Elsewhere, tin rose, supported by a fall in inventories amid already low stocks.
Stocks fell 70 tonnes to 8,515 tonnes on the day, said the LME.
Indonesian tin production has been sharply reduced since last October by government efforts to regulate small-scale mining and independent smelters.
Indonesia is the world's second largest producer, following China.
'One thing appears more certain, (tin) production is unlikely to return to the levels seen last year,' said UBS.
In other metals, zinc was flat at 3,675 usd, lead was down at 1,990 usd per tonne against 2,020 usd Friday. Nickel was unchanged at 48,500 usd per tonne, and aluminium eased to 2,839 usd from 2,854 usd Friday.
anealla.safdar@thomson.com |
