Jan. 9 -- Copper futures in Shanghai rose after plunging 9 percent last week on signs the decline in prices may spur buying from China, the world's biggest consumer of the metal used to make wires and pipes.
The level of copper stockpiles on the London Metal Exchange bought and due for future delivery, known as canceled warrants, almost tripled since Jan. 3 to 21,600 metric tons, with most increases in Asian warehouses, a signal demand may be recovering in the region.
``We expect most of the canceled warrants to be bound for China,'' said Lu Chenghong, a trading manager at Golden Dragon Precise Copper Tube Inc., today. Buying from new investment funds allocating assets may also support the market, he said.
Copper for delivery in March on the Shanghai Futures Exchange rose, the first day in four, as much as 430 yuan, or 0.8 percent, to 53,170 yuan ($6,808) a metric ton. The contract, which fell to the lowest since April 6 yesterday, traded at 52,940 yuan at the market's midday close.
Metal for immediate delivery in Changjiang, Shanghai's biggest spot market, rose as much as 1,010 yuan, or 1.8 percent, to 55,960 yuan a ton.
Chinese buyers may come back into the market after the Chinese New Year on February 18, UBS AG analysts said in a report yesterday.
Copper for delivery in three months on the London Metal Exchange traded $9 higher at $5,615 a ton at 12:15 p.m. Shanghai time, after falling 11 percent last week.
Home Sales
An increase in U.S. home sales may also be boosting prices, Golden Dragon's Lu said. Builders are the biggest users of copper in the U.S., the world's second largest user of the metal after China.
Sales of existing homes rose in October and November, the first back-to-back monthly gain since late 2005. New-home sales are up too, helping pare the number of unsold properties to 545,000 from a record 573,000 in July.
Federal Reserve Vice Chairman Donald Kohn said yesterday there are ``tentative signs'' the housing market may be stabilizing.
The slowing U.S. home building market helped drag copper prices down 25 percent in London in the past three months and helped push up stockpiles in New York, London and Shanghai by 53 percent.
Shanghai aluminum rose, the first day in four, as much as 300 yuan, or 1.6 percent, to 19,660 yuan and traded at 19,630 yuan at midday.
A futures contract is an obligation to buy or sell a commodity at a fixed price for a specific delivery date.
豫公网安备41010502003434号