Copper improves, may slip further

Print this page Posted on : 06-25-2009 by recycleinme.com

A weaker dollar helped buoy copper prices on Wednesday, but analysts say further losses are likely as the market acknowledges that recent gains have been built on the quicksand of Chinese demand.

Three-month copper on the London Metal Exchange was trading at $4,922 a tonne at 1012 GMT compared with $4,805 at the close on Tuesday.

PHENOMENON

However, supporting copper prices were some expectations that the copper market surplus this year may not be as high as previously expected.

That is reinforced by falling stocks.

Stocks of copper in LME warehouses at 7-month low around 275,000 tonnes compare with levels around 500,000 tonnes earlier this month. Much of the difference has made its way to Chinese state reserves and consumer stockpiles.

Analysts say buying by China's SRB for the country's stockpiles is also a phenomenon in the aluminium market.

Material heading towards China is reflected in the cancelled warrants or material already earmarked for delivery, which jumped to above 158,000 tonnes on Tuesday from near 100,000 tonnes on Monday.

Aluminium was at $1,630 a tonne from $1,605, zinc was at $1,575 from $1,519, lead was at $1,662 from $1,620, tin at $14,700 from $14,550 and nickel at $15,200 from $14,610.

Source : Business Line