Metal Price Shanghai copper falls on Dubai
Dubai’s debt woes shook the financial world and the trust of Western investors who had turned to the Gulf region for help during the financial crisis, sinking global stocks and driving the dollar higher. Shanghai copper fell nearly 2 percent on Friday, tracking London’s losses in the previous session, as the debt problems in Dubai jangled the nerves of investors and a rebound in the dollar weighed.
“The copper market so far has not fallen as deeply asfeared, as there are uncertainties around the development of the Dubai problem, and more importantly, investors are still confident in the economic recovery in the United States,” said Wang Zhouyi, an analyst at Shanghai CIFCO Futures.
“If the Dubai problem gets more serious, copper is likely to be dragged into correction next week.”Even as metals investors are generally bullish on long-term prospects, they have turned more cautious and nervous as uncertainties dominate the short-term market outlook, analysts and traders said.
“A lot of investors have opted for very short-term trade lately, and change their positions constantly. They get nervous when they hear even the leaves rustling in the wind,” said Zhu Yanzhong, an analyst at Jinrui Futures.
“There is no clear direction in the market. Fundamentals don’t support the current prices, as weakened consumption can’t catch up with high prices.”
Shanghai’s benchmark third-month copper futures contract SCFc3 fell 1.5 percent to 54,070 yuan a tonne by 0225 GMT, retreating further from a 14-month peak of 55,500 yuan hit in the previous session, on course for a 0.7 percent weekly rise.
The most-active contract for March delivery SCFH0 fell 1.7 percent to 54,390 yuan a tonne. Three-month copper on the London Metal Exchange MCU3 edged up $14 to $6,835 a tonne, nearly unchanged from a week earlier.
“We are approaching the end of the year, and investors are getting more cautious. Even though they are in general bullish, they are not very enthusiastic about pushing prices to new highs in the near term, as proved by falling open interest,” said a copper trader based in eastern China’s Zhejiang Province.
On the fundamentals side, Peru’s Antamina, one of the world’s largest copper and zinc mines, signed a new three-year labour contract with its workers, ending four months of tense negotiations and erasing the spectre of a strike.[ID:nN26393774]
Japanese smelters expect tough negotiations on next year’s copper processing fees as they face increased competition from refineries from China and tight global ore supplies.[ID:nT1285]
Base metals prices at 0225 GMT, Metal Last Change Pct Move End 2008 Pct chg 2009
LME Cu 6835.00 14.00 +0.21 3060.00 123.37
SHFE Cu* 54070.00 -830.00 -1.51 23840.00 126.80
LME Alum 2010.00 1.00 +0.05 1535.00 30.94
SHFE Alum* 15540.00 -115.00 -0.73 11540.00 34.66
COMEX Cu** 309.60 -6.90 -2.18 139.50 121.94
LME Zinc 2250.00 -6.00 -0.27 1208.00 86.26
SHFE Zinc 18070.00 -220.00 -1.20 10120.00 78.56
LME Nickel 16500.00 -75.00 -0.45 11700.00 41.03
LME Lead 2355.00 15.00 +0.64 999.00 135.74
LME Tin 14900.00 -70.00 -0.47 10700.00 39.25
LME/Shanghai arb^ 524 Dollar/yuan 6.8268 \ 6.8282 ** 1st contract month for COMEX copper * 3rd contact month for SHFE aluminium, copper and zinc ^ LME 3-m copper in yuan, including 17 pct VAT, minus SHFE third month (Editing by Clarence Fernandez) ((rujun.shen@thomsonreuters.com; +86 21 6104-1779; Reuters Messaging: rujun.shen.reuters.com@reuters.net))
((If you have a query or comment on this story, send an email to news.feedback.asia@thomsonreuters.com)) Reuters 3000Xtra subscribers can access Metals Production Database by clicking on URL below mpd.session.rservices.com.
The Shanghai Futures Exchange is expected to release its weekly copper warehouse stocks, alongside stocks of other commodities, after the market closes. Shanghai’s copper stocks had been rising for 4 straight weeks, up 12 percent during the period to 107,405 tonnes.
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