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Copper rises on rosy data

(China Daily/Agencies)
Updated: 2009-12-03 08:06

Shanghai copper rose more than 1 percent yesterday, while London futures hit fresh 14-month highs, underpinned by speculative hopes after recent positive data from China and the United States.

London Metal Exchange copper traded $15 lower at $7,060 a ton, having earlier touched a new 14-month high of $7,110, as investors who took fright last week when news emerged of Dubai World's debt problems continued to re-enter the market.

Benchmark third-month Shanghai copper rose 660 yuan ($97) to 55,310 yuan, having earlier touched 55,570 yuan, its highest since September 2008.

"Things are looking steady. The dollar has given up the ground it took on the Dubai debt news. Dips are being bought and any positive news seems to mean new highs for copper," a trader in Hong Kong said.

"People are talking about copper at new record highs but those are still $2,000 away. The next level should be around $7,250, where things broke down last year. There is not a lot of fundamental justification for new highs. It's all about weight of money."

Copper prices have risen more than 130 percent this year, on course for their biggest annual increase since at least 1978, but remain some way off a record peak of $8,940 struck in July last year.

"I struggle a little to see why prices are this high. The dollar is going through a fragile period but we haven't seen a lot of copper specific news," David Moore, Commonwealth Bank Commodities strategist in Sydney said.

"Some of the macro data was pretty strong... but exchange stocks are nudging higher and some of the supply side issues that had the potential have subsided in recent weeks yet copper is still strong."