LME copper up 3 pct, fundamentals strong
Thu Mar 8, 2007 1:53 PM GMT138
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By Daniel Magnowski
LONDON (Reuters) - London copper futures jumped 3.1 percent on Thursday as confidence returned to equity markets and investors concentrated again on supply and demand, analysts said.
London Metal Exchange copper for delivery in three months traded as high as $6,330 per tonne and at 1115 GMT was quoted at $6,295/6,305, up $155 from Wednesday's close.
"Copper and zinc have suffered a similar fate in the early months of 2007; an overly aggressive technical sell-off. As forecast, they are both now in recovery mode, and we believe we have now seen the lows for these metals for this year," Standard Bank said in a market report.
"For copper prices, we see plenty of support going forward and the potential for upside surprises."
Copper was badly knocked when investors sold risky assets including commodities in the worldwide sell-off of last week and earlier this week, but has recovered by more than $500 since Tuesday.
Steelmaking raw material nickel extended its sequence of hitting new highs, this time touching $43,150.
French metals group Eramet, which reported a 60 percent rise in operating income at its nickel division, described current prices as "speculative and vulnerable to any slowing of demand"
.
Still, with the past week's global flight from risk apparently over, investors will once again turn their attention to an underlying picture of tight supply and strong demand, UBS head of base metals strategy John Reade said in a note.
"With risk aversion less of a factor we expect the tight supply/demand fundamentals to come to the fore ahead of the onset of the peak demand season and for higher prices to reflect this," he said.
The FTSE index of 100 shares was 0.75 percent higher by mid-morning in London.
Zinc was up $45 at $3,405/3,425 and aluminium was $8 higher at $2,738/2,742.
Tin was $100 higher at $13,700/13,800 and lead was up $25 at $1,875/1,89
LME copper up 3 pct, fundamentals strongThu Mar 8, 2007 1:53 PM...
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