Copper Futures in Shanghai Climb on Signs of Rising Investment
Copper futures in Shanghai rose for a third straight day amid signs that investors are increasing their bets that demand for the industrial metal will increase in the U.S. and China, the world’s two largest users.
The number of open copper contracts, or buy and sell positions, on the London Metal Exchange, rose 10 percent to 236,683 between the end of last year and Jan. 22, according to Bloomberg data. On the Shanghai Futures Exchange, the number of open copper contracts rose at least 20 percent over the same period, trader Wu Bowen at Shanghai Jinpeng Futures Co. said.
The increases show “there are new funds moving into the metals market,” said Shen Jianyun, a trading manager at China International Futures (Shanghai) Co., today. Also, “the U.S. housing market seems to be recovering.”
Copper for March delivery on the Shanghai Futures Exchange rose 1,620 yuan, or 3.1 percent, to settle at 54,020 yuan ($6,950) a ton. The contract has gained 5.3 percent since Jan. 19., when it closed at its lowest level in more than nine months.
Metal for immediate delivery in Changjiang, Shanghai’s biggest spot market, rose as much as 1,220 yuan, or 2.2 percent, to 57,000 yuan a ton today.
Copper for delivery in three months on the London Metal Exchange gained as much as $85, or 1.5 percent, to $5,745 a metric ton, and traded at $5,716 at 3:34 p.m. Shanghai time. The contract is on course for its fourth straight daily gain.
Housing starts in the U.S., where builders are the biggest copper user, unexpectedly rose in December, by 4.5 percent month-on-month, as sales improved. China imported 11 percent more of the metal and its products in December last year, the first year-on-year gain since October 2005.
Demand Forecast
David Lilley, a partner at Red Kite Management Ltd., which has base-metals hedge funds worth more than $1 billion, said in remarks reported yesterday that copper prices will rebound on rising industrial and housing demand in China and the U.S.
Consumption of the metal in the Asian nation has grown at an average of 16 percent a year for the past six years, and the trend may continue, Lilley said.
Maike Futures Co., a brokerage that trades on the Shanghai Futures Exchange, forecast Jan. 20 that Chinese copper demand will rise 7.8 percent this year to 4.2 million tons.
Aluminum futures in Shanghai rose for a fifth day, rising 170 yuan, or 0.9 percent, to settle at 19,650 yuan.
A futures contract is an obligation to buy or sell a commodity at a fixed price for a specific delivery date.
Source: www.bloomberg.com
