Copper Trades Near 4-Week High
Source: Bloomberg, Li Xiaowei, Kim Kyoungwha (6/28/10)
"Copper traded near the highest level in four weeks."
Three-month delivery copper rose as much as 1% to $6,840.25, a metric ton on the London Metal Exchange, and traded at $6,777 at 3:37 p.m. in Shanghai. The metal rose to $6,875 a ton on June 25, the highest price since June 1.
Shanghai copper stockpiles decreased by the most in 11 months last week, to the lowest level since the week ended Feb. 19. Inventories monitored by the LME have declined 9.6% this year and cancelled warrants, or the metal earmarked for delivery, have increased to the highest level since March. China is the world's largest copper user.
"Reductions in London and Shanghai inventories provided support for copper prices," Yuan Guangshan, an analyst at Zhongcai Futures Co. said from Shanghai today. "Whether the declines can be sustained is a question, and our answer is probably no."
Copper posted the biggest weekly gain in four months last week as the dollar weakened, boosting demand for commodities. The metal, used in wires and pipes, is still almost 16% off an April peak on concerns that the global economic recovery may slow, hurting demand.
A group of 20 leaders responded to the European debt crisis with deficit-reduction targets and agreed to pursue higher capital requirements for banks once economic recoveries take hold. Leaders said nations can move at their own pace and pledged to fulfill existing stimulus plans.
"While mixed macro data from OECD economies may continue to tug on sentiment in the coming weeks, we expect the continuation of broadly positive data flow from key developing economies to keep prices supported," said Hussein Allidina, head of commodity research with Morgan Stanley, referring to base metals.