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To: LoneClone who wrote (17478)	4/9/2008 11:13:59 PM
From: LoneClone	Read Replies (1) \| Respond to of 194551

Copper Futures to Hit High in First Half of 2008, Though Upside May Be Limited By Interfax-China 09 Apr 2008 at 11:08 AM GMT-04:00 resourceinvestor.com SHANGHAI (Interfax-China) -- Copper futures on the London Metal Exchange (LME) may hit the previous historic high of $8,800 per tonne by the end of the first half of 2008, but will be limited by a relatively weak market as China's consumption has yet to pick up, analysts told Interfax this week. "LME copper may touch the $8,800 historic high point by the end of the first half, but I am not confident that it will surge above that to another historic high as the long-term copper futures premium against the spot market shows that China's consumption is weaker than expected, with copper users refusing to stockpile," analyst Sun Jiequn, from Nanyue Futures, said. The other main factor affecting copper prices is U.S. economic performance. Recent rescue policies seem to be having the desired effect, and as the U.S. dollar index is unlikely to fall under 70 points this year, investor confidence as well as LME copper prices may face a hammering, Sun said. "That said, London copper prices may maintain high levels as the LME is controlled by major investment funds, and it is in their interests to keep copper inventories low in order to support copper futures prices," Sun said. "The U.S. subprime crisis and possible slowdown of the global economy will on one hand drag down copper consumption, while on the other hand, U.S. dollar depreciation will support an upside copper price trend. However, any economic slowdown will take time to impact and spread, and we will have to wait and see how copper prices on the LME and in China respond in the second quarter. It is worth noting though that speculative funds are manipulating the market, and LME copper prices are expected to range between $8,000 per tonne and $9,000 per tonne in the coming period," Li Junchao, from Shenyin Wanguo Futures, said. LME copper prices have jumped by as much as 30% from the beginning of the year, on the back of U.S. dollar depreciation and widespread liquidity in the commodity market to maintain value. "LME copper stockpiles are on the down, mainly in the European and U.S. markets, with part of their stockpiles being transferred to China, while the European market in particular is showing strong consumption. However, the expected peak consumption season in China hasn't arrived yet, and as far as I am aware, downstream copper fabricators are not operating at full capacity due to negative sentiment for the economic outlook," Li said. The most traded June 2008 copper delivery on the Shanghai Futures Exchange increased RMB 1,220 ($174.24) per tonne, or 1.82%, to close at RMB 65,770 ($9,393.03) per tonne yesterday. Domestic spot copper prices remained at around RMB 65,800 ($9,397.32) per tonne on Tuesday in the Shanghai Yangzte River Market. Commentary On March 5th Interfax called the peak in COMEX copper price at $3.98 after which it promptly fell back below $3.50. Now that the price has again attacked the $4 mark, we believe that there is every chance of a double top with price once again retreating from these highs. That said, the Chinese will have to restock eventually, so downside should be limited to the base around $3.50. © Interfax-China 2008. For further information regarding Interfax China Commodities Daily Reports, contact David Harman at david.harman@interfax-news.com. Interfax also publishes a comprehensive China Grains & Soft Special Report in March 2008, contact David Harman for details.