Copper Climbs as China's Imports Increase for a Second Month -Shanghai Metals Market

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Copper Climbs as China's Imports Increase for a Second Month

Industry News 09:01:47AM Jan 12, 2010 Source:SMM

Jan. 11 (Bloomberg) -- Copper rose in New York and London as imports of the metal into China, the world's largest user, climbed for a second month and the dollar declined.

Shipments of copper and copper products into China rose to about 369,400 metric tons in December, the Customs General Administration said yesterday in Beijing. That was up 27 percent from November and 29 percent from a year earlier, according to Bloomberg data. Record imports in last year's first half helped copper prices to more than double in 2009.

"China's got an insatiable appetite for copper,"said David Thurtell, a Citigroup Inc. analyst in London. Imports "might stay strong"this year, he said.

Copper futures for March delivery rose 4.05 cents, or 1.2 percent, to $3.441 a pound on the New York Mercantile Exchange's Comex unit. Prices are up 2.8 percent this month.

On the London Metal Exchange, copper for delivery in three months advanced $106.50, or 1.4 percent, to $7,567.50 a ton ($3.43 a pound). Aluminum, tin and zinc rose. Lead and nickel declined.

The dollar dropped to a three-week low against the euro, reducing the relative cost of metals priced in the greenback for holders of the single European currency.

"China is a vast consumer of raw materials,"said Matt Zeman, a LaSalle Futures Group Inc. metals trader in Chicago. "Good numbers out of China and a lower dollar equals higher commodity prices."

Import Arbitrage

China probably bought copper in October and November, when prices averaged less than $7,000 a ton, Citigroup's Thurtell said. "People have been expecting imports to fall back considerably for many, many months,"he said.

China's copper imports may increase after prices in Shanghai climbed high enough above international benchmarks to make purchases abroad attractive, according to Gayle Berry, a Barclays Capital analyst in London. "With the reopening of import-arbitrage in recent weeks, imports can be expected to rise further from December's strong figure,"she said.

Copper for immediate delivery, the best performer last year among spot-metal contracts on the LME, will average $7,138 a ton this year, according to the median of 23 analysts surveyed by Bloomberg. That would be 38 percent more than last year's average price. The spot price rose 1.4 percent to $7,539 a ton in London.

Miners have done "very little"hedging against a drop in copper prices in recent weeks, Macquarie Group Ltd. said today in a report. That may stem partly from "substantial pressure"on publicly traded companies to refrain from hedging because investors want full exposure to metal prices, the bank said.

Chinese Economy

The dollar lost 4.2 percent against a basket of six major currencies last year, helping to boost copper prices along with forecasts for a rebound from the world recession. China's economy may grow as much as 16 percent this year with accelerating inflation and the risk that property markets may overheat, government economists said today.

"The data certainly suggests the world economy is well on its way to recovering,"said Shi Hai, an analyst at Shanghai Tonglian Futures Co. "The data has reaffirmed investors' belief that China will continue to lead the rebound."

Inventories of copper in warehouses monitored by the LME rose for a 47th day to 515,200 tons, the highest amount since March, according to a daily exchange warehouse report today.
 

Copper Climbs as China's Imports Increase for a Second Month

Industry News 09:01:47AM Jan 12, 2010 Source:SMM

Jan. 11 (Bloomberg) -- Copper rose in New York and London as imports of the metal into China, the world's largest user, climbed for a second month and the dollar declined.

Shipments of copper and copper products into China rose to about 369,400 metric tons in December, the Customs General Administration said yesterday in Beijing. That was up 27 percent from November and 29 percent from a year earlier, according to Bloomberg data. Record imports in last year's first half helped copper prices to more than double in 2009.

"China's got an insatiable appetite for copper,"said David Thurtell, a Citigroup Inc. analyst in London. Imports "might stay strong"this year, he said.

Copper futures for March delivery rose 4.05 cents, or 1.2 percent, to $3.441 a pound on the New York Mercantile Exchange's Comex unit. Prices are up 2.8 percent this month.

On the London Metal Exchange, copper for delivery in three months advanced $106.50, or 1.4 percent, to $7,567.50 a ton ($3.43 a pound). Aluminum, tin and zinc rose. Lead and nickel declined.

The dollar dropped to a three-week low against the euro, reducing the relative cost of metals priced in the greenback for holders of the single European currency.

"China is a vast consumer of raw materials,"said Matt Zeman, a LaSalle Futures Group Inc. metals trader in Chicago. "Good numbers out of China and a lower dollar equals higher commodity prices."

Import Arbitrage

China probably bought copper in October and November, when prices averaged less than $7,000 a ton, Citigroup's Thurtell said. "People have been expecting imports to fall back considerably for many, many months,"he said.

China's copper imports may increase after prices in Shanghai climbed high enough above international benchmarks to make purchases abroad attractive, according to Gayle Berry, a Barclays Capital analyst in London. "With the reopening of import-arbitrage in recent weeks, imports can be expected to rise further from December's strong figure,"she said.

Copper for immediate delivery, the best performer last year among spot-metal contracts on the LME, will average $7,138 a ton this year, according to the median of 23 analysts surveyed by Bloomberg. That would be 38 percent more than last year's average price. The spot price rose 1.4 percent to $7,539 a ton in London.

Miners have done "very little"hedging against a drop in copper prices in recent weeks, Macquarie Group Ltd. said today in a report. That may stem partly from "substantial pressure"on publicly traded companies to refrain from hedging because investors want full exposure to metal prices, the bank said.

Chinese Economy

The dollar lost 4.2 percent against a basket of six major currencies last year, helping to boost copper prices along with forecasts for a rebound from the world recession. China's economy may grow as much as 16 percent this year with accelerating inflation and the risk that property markets may overheat, government economists said today.

"The data certainly suggests the world economy is well on its way to recovering,"said Shi Hai, an analyst at Shanghai Tonglian Futures Co. "The data has reaffirmed investors' belief that China will continue to lead the rebound."

Inventories of copper in warehouses monitored by the LME rose for a 47th day to 515,200 tons, the highest amount since March, according to a daily exchange warehouse report today.