Copper hits 2-month high

LONDON – Copper rose to a more than two- month high yesterday on hopes that economic stimulus packages in China, the world’s biggest user of the metal, and the United States will spur demand.

There is a sense that perhaps the worst is over,’ Stephen Briggs, commodity strategist at RBS Global Banking & Markets, said.
But with China it is very difficult to disentangle how much of it is real demand and how much is going to be stockpiling.’
China has started buying copper from domestic bonded warehouses and overseas markets as the country moves to triple its state reserves to about one million tonnes, according to trade sources last week.
However, concerns about demand from the rest of the world continue to weigh on industrial metal prices.
Three-month copper on the London Metal Exchange rose to US$3 669 a ton, the highest level since December 1, from US$3 540 at the close on Friday.
Copper prices jumped more than 12 per cent last week.
Briggs said the rally was sustainable and while there may be a correction at some point copper prices were not going to fall back to US$2 800 a ton.
Shanghai base metals mostly tracked the gains in China’s stock market last week, spurred by a better-than-expected purchasing managers’ index and a surge in bank lending that strengthened hopes for an early recovery of the Chinese economy.
Chinese equities ended higher yesterday, extending a week-long rally, but some analysts said heavy profit taking in the afternoon suggested the rally was unsustainable.
– Nampa-Reuters