Shanghai Copper Rises 1.3 pct, Chasing LME Gains

MANILA, June 26 -- Shanghai copper rose for a fourth straight session on Friday, chasing gains in London the previous day when futures touched near two-week peaks.

    "London was up last night so the Shanghai market followed it lightly," said a Shanghai-based trader. "Right now, we are seeing 'buy Shanghai, sell London' because of some arbitrage-related selling."

    Shanghai third-month copper added 520 yuan to 39,830 ($5,832) yuan a tonne by 0330 GMT, heading towards a more than 2 percent gain for the week.

    Copper for three-month delivery on the London Metal Exchange eased $45 to $5,085 a tonne.

    LME closed up $75 at $5,130 a tonne on Thursday, marking its third straight day of gains, on creeping optimism about the fate of the global economy with the release of some encouraging U.S. data earlier this week.

    But some analysts think the market remains largely directionless.

    "The market is pretty volatile due to uncertainty about the economy. The leading indicators appear to be very strong but we haven't seen a real recovery on the real economy yet," said Bonnie Liu, an analyst at Macquarie.

    "There's a lot of confusion in terms of reading the data and that's the reason why the equity and the commodities markets go up and down over the past 3-4 weeks."

    A better economic outlook from the OECD and data showing U.S. durable goods orders rose unexpectedly on Wednesday helped push up copper prices, only to give up some of those gains as caution set in when the Federal Reserve said the economy would remain weak for a time.

    On Thursday, there were fresh signs of weakness in the U.S. jobs market, eclipsing figures showing that the recession-hit economy shrank slightly less in the first quarter than previously thought.

    The slower demand season in China in the next two months would be another factor that will weigh on commodity prices ahead, said Liu.

    "We do start to hear about stocks (of metals) building up in the domestic market, and that's like a threat to commodity prices," she said.

    (Source: Reuters)