Metals - Copper prices continue higher as mkt stabilises after 10 pct slide |
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Published
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Wed, 10 Jan 2007 13:47
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LONDON (AFX) - Copper prices continued higher, extending yesterday's gains, as the market stabilised after losing some 10 pct of its value since the start of the year.Other metals were also higher.At 12.17 pm, LME copper for three-month delivery, which earlier hit a high of 5,780 usd, climbed to 5,725 usd, against 5,625 usd at the close yesterday.'The worst for copper seems to have passed and prices have become more stable; indications of increased consumer demand (and) Chinese buying,' said UBS Investment Bank analyst Robin Bhar.Copper prices rose yesterday supported by consumer buying, notably from China. The market was also boosted by an LME daily inventory report showing a 2,300 tonne decline in stockpiles of the metal.Despite the large decline, however, overall stocks remain near their highest levels since March 2004. Also, the LME report today showed a 350 tonne increase in stocks.Overall, Bhar said market participants should wait until next week before placing bets on price gains in metals, saying the market remain at risk this week in light of the reweighting of the DJ-AIG commodity index.'There is evidence of support emerging for the base metals... although... we would recommend waiting until next week before going long or adding to existing longs,' he said.Turning to Chinese copper demand, Bhar said the outlook remains uncertain with some reports suggesting the lower prices will spur Chinese buying, and others suggesting demand will remain subdued in the first quarter.Separately, copper was finding support from the risk of supply disruptions at Codelco. Yesterday, the company evacuated part of its Chuquicamata copper mine in Chile because of the risk of rockslides.Codelco is the world's largest copper producer.Elsewhere, aluminium was flat at 2,665 usd a tonne, after having been the only metal to close up yesterday, aside from copper.'Aluminium has been drawing some support from diversification and reallocation of money by some funds looking for exposure to one of the LME's underperformers in 2006,' said Sucden analyst Michael Davies.In other metals, nickel increased to 31,150 usd a tonne against 30,250 usd at the close yesterday, lead edged up to 1,560 usd against 1,550 usd, zinc rose to 3,572 usd against 3,520, while tin rose to 10,350 usd against 10,100 usd.maytaal.angel@afxnews.comma/amCOPYRIGHTCopyright AFX News Limited 2006. All rights reserved.The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News.AFX News and AFX Financial News Logo are registered trademarks of AFX News Limited
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