Shanghai nonferrous metals yesterday rose sharply, with copper
and zinc futures jumping to the daily allowable limits, largely
triggered by falling inventory and rising expectations of robust
demand in 2008.
All the 11 copper futures contracts on Shanghai Futures
Exchange, SHFE, soared to their daily allowable limits. The most
actively traded copper futures contract for delivery in March
surged 4.99 percent, continuing the fourth day of price rise since
last Wednesday, to close at 58,460 yuan per ton.
Prices of all 11 zinc futures contracts on SHFE also jumped to
their daily allowable limits, with the most actively traded
contract rising 3.98 percent to close at 19,075 yuan per ton.
Copper inventory level on SHFE has dropped 66.7 percent from
August. Analysts said the sharp drop is because most metal
enterprises are stockpiling to prepare for next year's production
run.
"As 2008 approaches, many domestic metal processors and
manufacturers have gone on a buying spree to build up inventories
to meet expected production demand," said Li Jingyuan, analyst at
Haitong Futures Co.
Analysts said the rising spot prices of non-ferrous metals have
also prompted traders to buy futures in expectation of an eventual
narrowing of the price spreads.
In the domestic market, spot price of electrolytic copper
yesterday rose to as high as 63,000 yuan per ton, up 10.5 percent
over the past week.
Analysts said non-ferrous metals prices in the domestic market
were pushed up by last Friday's price surge in the international
market amid the rising optimism on the US economic outlook and the
growing demand for non-ferrous metals globally.
Last Friday, the three-month copper futures contracts on London
Metal Exchange (LME) rose 4.35 percent, the biggest one-day
increase in the past month, to $6,840 per ton, while the
three-month zinc futures contracts also climbed 4.09 percent to
$2,415 per ton.
Economists and analysts said latest figures about US consumer
spending indicated the US economy is unlikely to slacken.
According to figures released by the US Department of Commerce
on Friday, US consumer spending in November rose 1.1 percent from
October, the biggest monthly increase since July 2005, largely
surpassing the previous forecasts.
(China Daily December 25, 2007)
