LONDON: Copper edged higher on Wednesday as investors and industrial buyers took advantage of lower prices after a sell-off, although some analysts said there was potential for further falls.
“So far we’re holding downside support levels as scale-down buying is coming through from consumers and other investors who may have missed those lower levels a month or so ago,” Robin Bhar, head of metals research at Societe Generale in London, said.
Copper surged 12 percent in a rally during December, but has since eased back about 3 percent.
“I would be a bit cautious because if we get some selling and it breaches some of the moving average support levels or various trendlines, that could unleash a bit more selling,” Bhar added.
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He said he viewed any further falls as a buying opportunity as the market has strong fundamentals. There is uncertainty about supply due to Chinese import restrictions on copper scrap and labour contract talks at several mines, including the giant Escondida mine, Bhar said.
Benchmark copper on the London Metal Exchange was up 0.3 percent to $7,095.50 a tonne by 1047 GMT after a fall of 1.8 percent on Tuesday.
POSITIONS: Futures brokerage Gelin Dahua has cut its long position on the Shanghai Futures Exchange (ShFE) April copper contract by 75 percent over the past two days, according to Reuters calculations based on ShFE data.
LME ALUMINIUM: Three month LME aluminium rose 0.3 percent to $2,194.50 per tonne.
SHANGHAI ALUMINIUM: The most-traded March contract on the ShFE closed down 1.8 percent at its lowest finish since Dec. 19 as improving weather conditions smoothed the flow of ingots from China’s remote northwestern Xinjiang region to the east of the country.
“As the weather is okay now, transport will get better and people expect to see more ingot deliveries to (ShFE) warehouses,” said CRU analyst Jackie Wang.
ShFE aluminium stocks hit a record 773,941 tonnes last week.
FERROUS: Steel-linked zinc and nickel were pressured after Chinese iron ore futures fell for a fifth day running to 2-1/2 week lows, pressured by slow demand in the world’s biggest consuming nation amid ongoing curbs on steel production in a campaign against smog.
NICKEL/ZINC: LME nickel, mainly used in stainless steel, dropped 0.8 percent to $12,445 a tonne, while galvanizing metal zinc dipped 0.1 percent to $3,402.50.
Source: Brecorder.com
