BASE METALS: Copper Futures Gain On Strong Chinese Import Data

NEW YORK, Feb 14, 2011 (Dow Jones Commodities News via Comtex) -- Copper prices rallied to near-record highs Monday after data showed Chinese imports of the industrial metal surged.

The most-actively traded contract, for March delivery, was recently up 7.05 cents, or 1.6%, at $4.6065 a pound on the Comex division of the New York Mercantile Exchange. That's just shy of the metal's all-time intraday peak of $4.6375 set last week.

The gains came after stronger-than-expected import data from China, which as the world's largest copper consumer accounts for more than 40% of global annual consumption.

There, copper imports touched a four-month high in January, narrowing the rapidly industrializing nation's trade surplus and renewing confidence in the metal's near-term price prospects.

"Given the growth in underlying demand...China's monthly imports will have to rise further over the next few months," Barclays Capital analyst Gayle Berry said in a note to clients.

Preliminary data provided by the General Administration of Customs showed China imported 364,240 tons of copper, copper alloy and semifinished products in January, an increase of 5.7% from December and a rise of 25% from the same month a year earlier.

The data also boosted copper prices in Europe and Asia. Benchmark London Metal Exchange copper was recently up 1.5% at $10,106.25 a metric ton, a little short of its record $10,160 set a week ago. Shanghai Futures Exchange copper rose 0.1%.

But traders and analysts warned against pinning too much importance on the figures, which reflect the rush to import copper into China before the Lunar New Year holiday, which ended last week.

"Although the data is impressive, it is a one-off," said VTB Capital analyst Andrey Kryuchenkov. "We'll have to wait until the data for March and April come out to see if restocking after the holidays has really hit off."

A sustained move higher in copper prices will depend on a drawdown in exchange stockpiles, which are currently rising noted Kryuchenkov.

Copper inventories in LME-listed warehouses rose 5,050 metric tons to 401,775 tons Monday, up 15% since Dec. 10. The most recent Comex inventory data, released late Friday afternoon, showed a gain of 418 short tons to 76,709 short tons.

Meanwhile, tin, an industrial metal that is also traded on the London Metal Exchange, hit a fresh record of $32,350 a metric ton, as speculators continued to flock to the metal on the basis of its strong supply-demand outlook. The first ever exchange-traded fund for physical tin, launched by ETF Securities in December, has seen holdings more than double to 405 tons from 180 tons at the end of January.

The price of the metal, which is used in soldering, has soared 20% since the beginning of the year, but the move into uncharted territory is leaving brokers concerned the metal could be due for a correction.