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BIZCHINA> Top Biz News
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Shanghai copper futures sizzle
(China Daily/Agencies)
Updated: 2009-11-19 08:07 Copper futures traded in London, New York and Shanghai rallied to the highest level in 14 months as the dollar's decline boosted the appeal of raw materials as alternative investments. The metal used in construction and automobiles has more than doubled this year as the global economy recovers from its worst recession since World War II and a weaker dollar encourages investment in physical assets. The US currency fell yesterday for a third time in four days against a basket of six major currencies. "The weaker dollar and inflation expectations will put a floor under prices," said Cai Luoyi, an analyst at China International Futures (Shanghai) Co. "We're expecting some consolidation ahead as the market faces the quandary of improved demand and rising stockpiles."
The March-delivery contract on the Comex division of the New York Mercantile Exchange jumped to $3.16 a pound, the highest price since Sept 24, 2008. February-delivery copper on the Shanghai Futures Exchange added as much as 1.4 percent to 53,950 yuan a ton, the highest since Sept 23, 2008, and ended the day at 53,940 yuan. The metal also gained on speculation that rising consumption in China will offset weaker demand in the US. China and the US are the world's two biggest copper users. The metal for immediate delivery in Changjiang, Shanghai's biggest cash market, traded around 52,550 yuan a ton yesterday, nearly double the level at the start of the year, a sign demand may be improving. This helped reverse Tuesday's 0.4 percent drop after a report showed US industrial production expanded less than expected in October as manufacturing declined for the first time in four months. Still, inventories in Shanghai are at a five-year high of 104,939 tons. Copper stockpiles tallied by the London Metal Exchange rose for an 11th day on Tuesday to 410,000 tons, the highest since April 29. Among other LME-traded metals, aluminum rose to a three-month high of $2,066 a ton, and zinc gained to a three-week high of $2,289 a ton. Lead added 0.6 percent to $2,399.75 a ton, nickel was up 0.9 percent at $17,050 a ton, while tin climbed 1 percent to $15,100 a ton in afternoon trade in Singapore.
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