Copper gains as global growth fears recede

Print this page Posted on : 08-28-2007 by recycleinme.com

Copper prices in Shanghai rose nearly 2 per cent on Monday following sharp gains in late London trade on Friday ahead of a long weekend, and positive data from the US.

Solid US housing and durable goods numbers on Friday helped ease fears about a repeat of the paroxysms in world credit markets that have cast a pall over the outlook for global growth and corporate profits.

Aluminium Corp of China surged more than 30 per cent to HK$21.40, after earlier setting a fresh record. Jiangxi Copper rose around 20 per cent to also hit a record high.

Shanghai’s most active November contract was up 1.8 per cent or 1,190 yuan at 65,690 yuan ($8,681) a tonne at the close.

“Physical demand looks good, with premiums for imported copper rising. That could mean that there are expectations that there won’t be much stock around come September,” a dealer in Shanghai said. He added that should London Metal Exchange prices rally above $7,500, consumers would withdraw from the market.

“If prices get above $7,500, it will rip the bottom out of consumer demand”.

Copper for delivery for three months on the London Metal Exchange closed on Friday at $7,310 up, $50, ahead of the three-day-weekend in the United Kingdom. In late electronic dealing, prices rallied further to $7,470.

Shanghai zinc rose 1.7 per cent or 460 yuan to 27,420, but dealers said prices would be capped by weak spot demand.

Source : Business Line