subject: Frbiz.com Reported U.s. Copper Price At 16-month High [print this page] U.S. copper (HG-FT332.15-1.50-0.45%) finished at 16-month highs Monday, pushed up by lower inventories of the metal on the Shanghai futures exchange and a weaker U.S. dollar amid light, holiday-crimped trading.
The Shanghai exchange was the main lead for the U.S. copper market, with the London Metal Exchange remaining shut on Monday for the Christmas holidays and scheduled to reopen only on Tuesday.
LME copper rallied to $7,167 (U.S.) on Christmas Eve, $3 shy of a 16-month peak. Since Thursday, Shanghai copper has risen 2 per cent, indicating that LME prices could rally toward $7,300 this week if the gains in Shanghai held.
A strike at Chile's Altonorte smelter plant owned by Xstrata lent further support to prices, even as workers in the country's giant Chuquicamata copper mine run by Codelco were expected to vote against work stoppage.
Benchmark copper for March settled up 4.40 cents, or 1.3 per cent, at $3.3365 per pound on the New York Mercantile Exchange's Comex division. The contract had surged during the session to $3.3440, its loftiest level since Aug. 25, 2008.
Third-month Shanghai copper rose 1.1 per cent to 58,260 yuan ($8,528.52) a tonne by the close and earlier hit 58,890 yuan, its highest since early September, 2008.
Traders attributed the rally on both markets to the drop in copper stockpiles on the Shanghai Futures Exchange, which reversed a trend seen in recent months.
The dollar's slide against other leading currencies was another factor making dollar-denominated commodities such as copper more attractive to holders of money such as the euro.
"The lower inventories in Shanghai and the weaker dollar is lifting things," Matthew Zeman, head of trading with LaSalle Futures Group in Chicago.
"That said, in this kind of very light trading volume environment, any positive news, including the encouraging economic data lately, could lead to outsized price moves," Mr. Zeman added.
Supply threats in Latin America also supported prices.
Union workers at the 232,000 tonne-per-year Altonorte smelter in Chile began an indefinite strike just as owner Xstrata cut output at the facility to minimum levels for nearly a month for maintenance work.
The strike came as Chile's Chuquicamata copper mine was expected to head off work stoppage through a vote that could bring an end to a near year-long labour dispute at the mine owned by No. 1 copper producer Codelco.
Deliverable copper inventories in warehouses monitored by the Shanghai Futures Exchange fell to 96,362 tonnes from 104,377 tonnes a week ago, while stocks on warrant declined 11,892 tonnes to 30,609 tonnes.
Copper stockpiles monitored by the Shanghai exchange had risen almost sixfold since 2005.
Aside from its benchmark third-month contract, Shanghai's more-active fourth month copper, April , hit a high of 59,180 yuan, up 2.3 per cent on the day. That put the market on course for a rise of almost 150 per cent in 2009.
London Metal Exchange inventories, at 484,800 tonnes, have risen 42 per cent so far this year, and will see the highest year-end levels since finishing 2002 at more than 850,000 tonnes.
by: Frbiz
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