METALS-Copper Ends up Near Record on Chilean Supply Woes-Shanghai Metals Market

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METALS-Copper Ends up Near Record on Chilean Supply Woes

Industry News 10:08:32AM Dec 21, 2010 Source:SMM

NEW YORK/LONDON, Dec 20 (Reuters) - Copper prices climbed back towards record highs on Monday, after renewed supply
threats in top producer Chile provided an additional underpinning to the red metal's demand-driven rally this year.

For a second-straight session, copper prices managed to push higher in the face of a stronger dollar and persistent concerns over European debt, after the closure of a major port terminal in Chile, the world's top copper producer, reinforced widespread market expectations for tighter supply in 2011.

"Up until now, it was basically demand that was driving prices higher, but for the first time in months supply has become an issue again," said Adam Sarhan, chief executive of Sarhan Capital in New York.

On the London Metal Exchange, copper for three-months delivery CMCU3 ended up $131 at $9,201 per tonne, well within reach of its record high of $9,267.50 hit last week.

On the New York Mercantile Exchange, COMEX copper for March delivery HGH1 rose 4.70 cents, or 1.1 percent, to settle at $4.2060 per lb, near the upper end of its $4.1605 to $4.2235 session range.

COMEX copper hit a record at $4.2290 per lb last week.

Copper prices bounced on news that an accident at the Patache port in Chile over the weekend led to the collapse of a ship loading facility used to ship concentrates from the Collahuasi mine.

As a result, Collahuasi declared force majeure on copper concentrate sales.

Collahuasi is the world's No. 3 copper mine, producing some 535,000 tonnes a year, or 3.3 percent of global mined copper.

"It is a supportive factor in an already tight market, but I think it is unlikely that copper will see new highs on the back of this news," said Robin Bhar, an analyst with Credit Agricole.

"They are already looking for alternative ports. It should not have a major impact ... during the holiday the smelters should not have a big capacity anyway," he added.

Bhar said the mine operator's move to exercise force majeure could be a prudent measure to warn costumers of future delays.

As the latest Chilean supply-side issues unfolded, demand prospects continued to brighten.

Investors remained confident Chinese demand would remain strong, despite recent concerns that potential further monetary tightening in the world's top consumer of base metals could hit the country's demand.

Traders also said copper's move toward record levels earlier was part technical, with Shanghai copper's SCFC3 move to a 33-month high in Asia forcing shorts to cover.

Shanghai copper SCFc3 hit its highest level since March 2008.

LEAD BACKWARDATION

Traders said a premium for cash lead over the three-month contract did not accurately reflect the physical market, where the metal is in ample supply, but nevertheless added to price support.

The premium for cash lead climbed to the highest level since April 2009 against the three-month contract, helping to attract material into warehouses. MPB0-3 Lead stocks rose 150 tonnes to 207,750 tonnes, near 10-1/2-year peaks. MPB-STOCKS

"We may have a particularly strong demand profile for lead due to this weather," said analyst Stephen Briggs of BNP Paribas, adding, however, that, given stockpiles of the metal,

"It's more likely to be technical than fundamental."

Cold snaps tend to damage batteries, boosting replacement demand.

Lead CMPB3 finished up $20 at $2,440 a tonne.

Aluminium CMAL3 ended up $43 at $2,378 a tonne and zinc CMZN3 gained $15 to close at $2,289 a tonne.

Tin CMSN3 rose $140 to close at $26,190 a tonne, while nickel CMNI3 shed $450 to end at $24,550 a tonne.

Metal Prices at 1908 GMT

COMEX copper in cents/lb, LME prices in $/T and SHFE prices in yuan/T

Metal            Last    Change  Pct Move  End 2009   YTD Pct
move
 COMEX Cu       420.35     4.45     +1.07     334.65    25.61
 LME Alum      2378.00    43.00     +1.84    2230.00     6.64
 LME Cu        9201.00   131.00     +1.44    7375.00    24.76
 LME Lead      2439.50    19.50     +0.81    2432.00     0.31
 LME Nickel   24500.00  -500.00     -2.00   18525.00    32.25
 LME Tin      26180.00   130.00     +0.50   16950.00    54.45
 LME Zinc      2288.00    14.00     +0.62    2560.00   -10.63
 SHFE Alu     16550.00   -20.00     -0.12   17160.00    -3.55
 SHFE Cu*     68640.00   210.00     +0.31   59900.00    14.59
 SHFE Zin     18690.00   -90.00     -0.48   21195.00   -11.82

 

 

 

 

 

 

 

 

 

 

 

 

 

 

METALS-Copper Ends up Near Record on Chilean Supply Woes

Industry News 10:08:32AM Dec 21, 2010 Source:SMM

NEW YORK/LONDON, Dec 20 (Reuters) - Copper prices climbed back towards record highs on Monday, after renewed supply
threats in top producer Chile provided an additional underpinning to the red metal's demand-driven rally this year.

For a second-straight session, copper prices managed to push higher in the face of a stronger dollar and persistent concerns over European debt, after the closure of a major port terminal in Chile, the world's top copper producer, reinforced widespread market expectations for tighter supply in 2011.

"Up until now, it was basically demand that was driving prices higher, but for the first time in months supply has become an issue again," said Adam Sarhan, chief executive of Sarhan Capital in New York.

On the London Metal Exchange, copper for three-months delivery CMCU3 ended up $131 at $9,201 per tonne, well within reach of its record high of $9,267.50 hit last week.

On the New York Mercantile Exchange, COMEX copper for March delivery HGH1 rose 4.70 cents, or 1.1 percent, to settle at $4.2060 per lb, near the upper end of its $4.1605 to $4.2235 session range.

COMEX copper hit a record at $4.2290 per lb last week.

Copper prices bounced on news that an accident at the Patache port in Chile over the weekend led to the collapse of a ship loading facility used to ship concentrates from the Collahuasi mine.

As a result, Collahuasi declared force majeure on copper concentrate sales.

Collahuasi is the world's No. 3 copper mine, producing some 535,000 tonnes a year, or 3.3 percent of global mined copper.

"It is a supportive factor in an already tight market, but I think it is unlikely that copper will see new highs on the back of this news," said Robin Bhar, an analyst with Credit Agricole.

"They are already looking for alternative ports. It should not have a major impact ... during the holiday the smelters should not have a big capacity anyway," he added.

Bhar said the mine operator's move to exercise force majeure could be a prudent measure to warn costumers of future delays.

As the latest Chilean supply-side issues unfolded, demand prospects continued to brighten.

Investors remained confident Chinese demand would remain strong, despite recent concerns that potential further monetary tightening in the world's top consumer of base metals could hit the country's demand.

Traders also said copper's move toward record levels earlier was part technical, with Shanghai copper's SCFC3 move to a 33-month high in Asia forcing shorts to cover.

Shanghai copper SCFc3 hit its highest level since March 2008.

LEAD BACKWARDATION

Traders said a premium for cash lead over the three-month contract did not accurately reflect the physical market, where the metal is in ample supply, but nevertheless added to price support.

The premium for cash lead climbed to the highest level since April 2009 against the three-month contract, helping to attract material into warehouses. MPB0-3 Lead stocks rose 150 tonnes to 207,750 tonnes, near 10-1/2-year peaks. MPB-STOCKS

"We may have a particularly strong demand profile for lead due to this weather," said analyst Stephen Briggs of BNP Paribas, adding, however, that, given stockpiles of the metal,

"It's more likely to be technical than fundamental."

Cold snaps tend to damage batteries, boosting replacement demand.

Lead CMPB3 finished up $20 at $2,440 a tonne.

Aluminium CMAL3 ended up $43 at $2,378 a tonne and zinc CMZN3 gained $15 to close at $2,289 a tonne.

Tin CMSN3 rose $140 to close at $26,190 a tonne, while nickel CMNI3 shed $450 to end at $24,550 a tonne.

Metal Prices at 1908 GMT

COMEX copper in cents/lb, LME prices in $/T and SHFE prices in yuan/T

Metal            Last    Change  Pct Move  End 2009   YTD Pct
move
 COMEX Cu       420.35     4.45     +1.07     334.65    25.61
 LME Alum      2378.00    43.00     +1.84    2230.00     6.64
 LME Cu        9201.00   131.00     +1.44    7375.00    24.76
 LME Lead      2439.50    19.50     +0.81    2432.00     0.31
 LME Nickel   24500.00  -500.00     -2.00   18525.00    32.25
 LME Tin      26180.00   130.00     +0.50   16950.00    54.45
 LME Zinc      2288.00    14.00     +0.62    2560.00   -10.63
 SHFE Alu     16550.00   -20.00     -0.12   17160.00    -3.55
 SHFE Cu*     68640.00   210.00     +0.31   59900.00    14.59
 SHFE Zin     18690.00   -90.00     -0.48   21195.00   -11.82