Copper edges towards $8,000 on weak dollar
Mon 24 Sep 2007, 7:27 GMT
[-] Text [+] By Nick Trevethan
SINGAPORE (Reuters) - Shanghai copper rose half a percent on Monday, while London futures again edged up towards $8,000 a tonne on a weaker dollar and speculative buying.
Copper futures for delivery in three months on the London Metal Exchange were $40 higher at $7,920 at 0712 GMT. On Friday, prices hit $8,025, their highest since July 31.
"Markets have recovered following the equity and housing crunch in the U.S. and now the fundamentals are back in play. Things in China especially look robust," Gerard Burg, an analyst at National Australia Bank, said.
China's refined copper imports fell 11.5 percent to 87,192 tonnes in August from July, but remained 10.6 percent higher than in August 2006. Refined exports were down 37 percent year on year.
"A new high is possible but it will depend on the return of speculative money," Burg said.
Equity markets were up, with Australia's S$P/ASX 200 hitting a record high. BHP Billiton was 5.2 percent higher and Rio Tinto gained 3.4 percent.
"BHP and Rio are higher and metals prices are helping them along, but the market is sitting and waiting for data now and the inflation data on Friday will be the key," an Australian broker said.
A series of data from the United States including home sales, consumer confidence, durable goods, GDP and inflation numbers will help investors decide whether last week's 50 basis point cut in interest rates is enough to jumpstart the battered U.S. economy.
"Commodities are looking stronger despite the weakness in the United States. North America fundamentally just doesn't look right, but people are looking at the weak dollar and seeing bargains," the broker said. Oil was at $81.21, around $3 off a contract high, while gold was near a 28-year peak. The euro was around $1.41 just short of an earlier record high.
The Shanghai Futures Exchange December copper contract the most active, rose 300 yuan at 67,490 yuan a tonne at the close. Spot copper in Shanghai was up 375 yuan a tonne, trading between 67,000 and 67,200 yuan.
"Prices in Shanghai have been reluctant to follow the (LME) rally and the market remains cautious," a Shanghai dealer said.
"There is a chance that the price in London will hit $8,000 again, but trade will be volatile and may not sustain that level."
Supply concerns remained supportive after unions at Southern Copper's Cuajone mine and Ilo smelter said they backed a plan to strike starting October 2.
Southern Copper is a unit of Grupo Mexico, which on Thursday said it had declared force majeure on some copper clients due to a separate strike at the giant Cananea mine in Mexico.
Lead jumped $70, or 2.1 percent to $3,420 a tonne and earlier traded as high as $3,437, just $63 short of July's record.
A dominant position has emerged according to latest LME data, showing that 50-80 percent of stocks on warrant were held by a single party, which could represent over 16,000 tonnes of metal.
That was reflected in the wide $75 premium for cash lead above the benchmark future.
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