Copper futures traded on the Shanghai Futures Exchange settled slightly higher Monday, as high domestic cash premiums triggered light demand, analysts said
The benchmark February 2007 contract rose CNY390 to settle at CNY59,690 a metric ton, after trading between CNY58,900/ton and CNY60,360/ton.
Trading volume for all Shanghai copper futures rose to 44,788 lots from 35,668 lots Friday.
One lot is equivalent to five tons.
"The high cash premium, which is about CNY1,000 higher than the front month contract, prompted some light buying early in the session, though profit-taking pared the gains later," said Shen Haihua, senior analyst at Maike Futures Co.
On the Changjiang Nonferrous Metals Trading Market, a major spot metals market in Shanghai, spot copper was quoted at CNY61,550-CNY61,750/ton, up from Friday's CNY61,200-CNY61,400/ton.
"Some market participants expect an upward correction in London Metal Exchange three-month copper, when the market opens after the holiday, following sharp losses last week," said Hu Bin, an analyst at Yong'an Futures Co.
LME three-month copper lost 4.7% last week on year-end liquidation and selling on charts.
"Although we might see a rebound this week, LME three-month is still in a downward trend," said Shen.
Analysts said SHFE prices will thus be pressured, though the strong domestic spot market may prevent SHFE prices to fall as much as LME three-month.
Three-month LME copper fell $5 to end the late kerb Friday at $6,325/ton.
Shanghai's aluminum futures settled mostly higher, tracking Friday's LME three-month aluminum, analysts said.
The benchmark March 2007 contract settled CNY100 higher at CNY20,120/ton, after trading between CNY20,020/ton and CNY20,180/ton.
China's futures markets are off-limits to foreign investors.
Monday's closing prices in yuan a metric ton versus LME late kerb prices from Friday in dollars a metric ton:
Copper Change Aluminum Change
Shanghai Feb 59,690 Up 390 Mar 20,120 Up 100
LME 3Mo $6,325 Dn $5 3Mo $2,799 Up $31
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