Copper gains on LME

Print this page Posted on : 06-30-2009 by recycleinme.com

Copper prices rallied on Monday, echoing gains in equities as confidence seeped in that the global economy was improving, but gains were capped as market players bet recovery would be slow and painful.

Copper for three-month's delivery on the London Metal Exchange traded at $5,062 a tonne at 0927 GMT from $5,035 at the close on Friday. Prices hit a day's high of $5,125. The copper demand outlook is expected to be soft over the northern hemisphere summer - the traditionally quiet season.

But inventories in warehouses registered with the London Metal Exchange continue to fall - down by 2,950 tonnes to 267,300 tonnes - and open interest has increased in recent weeks thanks to the building of new long positions.

A vast Chinese stock-piling process has helped copper rally 64 per cent so far this year, but this support is subsiding.

Sentiment may also soften as China's copper imports, which hit successive record highs in previous months due to high domestic prices, are halting at the border after a collapse in Shanghai's premium over world market prices.

Shanghai's bonded warehouses, where metal is stored before being declared for customs, may now hold over 50,000 tonnes of refined copper, traders estimated on Friday. Nonetheless, analysts see demand from the world's top copper consumer reviving again towards the end of the year.

Among other industrial metals, aluminium, used in transport and packaging, was at $1,640 from $1,647. Inventories rose 5,075 tonnes to within touching distance of a record high around 4.4 million tonnes.

Zinc was at $1,565 from $1,581 and battery material lead was at $1,695 from $1,715.

Tin was at $14,700 from $14,795. Tin was in a backwardation of $36/86 - a premium for cash material over the three-month contract - as investors eyed possible tightness in the market.

Cancelled warrants on tin - material tagged for delivery - stood at 690 tonnes from 860 tonnes, and accounted for 4 per cent of total stocks. Inventories fell 195 tonnes to 16,760 tonnes.

Nickel was at $15,730 a tonne from $15,800.

Source : Business Line