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thekiwi

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from the news wires.......

 

LME 3-month copper at $3,957/ton, +$12 on London PM after

sharp gains overnight in still volatile, thin conditions as declining stocks,

weaker USD triggered short-covering, stops. Technically, close above 200-day

moving average underlines ongoing upside potential, particularly in current

jittery sentiment, with next targets $4,015,$4,084; but many players may be wary

of repeating last year's major sell-off during LME Week, especially with looming

option declarations, says Standard Bank, and close below $3,801 could provide

first sign of sustained near-term corrective weakness.

 

worth keeping an eye on re previous post.

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Wednesday October 26, 2:20 PM

FOCUS: High Copper Prices Hurting Asia Spot Copper Trade

By Glenys Sim

 

Of DOW JONES NEWSWIRES

 

 

SINGAPORE (Dow Jones)--Copper prices have remained high on the London Metal Exchange, keeping the bulls happy, but that may not necessarily be a good thing, as high prices are also keeping Asian consumers away from the market, resulting in very little business for those dealing in the red metal.

 

"The prices are just too high. No one wants to do business at this level," said a Tokyo-based copper trader.

 

Spot copper premiums in Asia have been on a decline since July as record copper prices kept buyers away. LME cash copper was trading at $4,079.50/ton in Asia Wednesday.

 

"Spot business has been very poor in the past few months. I think many people are trying to use what they have on hand," said another trader at a large Japanese trading firm, adding that many traders are unwilling to sell at "such low premiums" while consumers are unwilling to buy at "such high prices."

 

Spot premiums for Japanese copper cathodes are currently at $90-$100 a metric ton, cost, insurance, freight over the LME cash price, down about $10/ton from July, traders said.

 

In Korea, premiums were put around $80-$90/ton, a price last quoted in July.

 

"Spot trading has come to a standstill for the past few months. I can't even quote you a spot price now because no one is buying," said a Seoul-based metals trader.

 

In Taiwan, spot copper premiums have fallen from $100-$110/ton in July to the current level of $60-$70/ton.

 

The picture is similar in Malaysia and Singapore, said traders.

 

While consumers are buying hand-to-mouth as they wait for a fall in prices, it looks as though more gloom lies ahead, with spot premiums widely expected to rise in the coming weeks once those shying away now return to the market.

 

In a sign prices aren't expected to fall much further, Chilean state copper giant Corporacion Nacional del Cobre de Chile, or Codelco, last week set its 2006 copper premiums for South Korea at $112/ton vs $120/ton now, and at $115/ton vs $125/ton now for Japan and Taiwan.

 

Consumers were hoping for a bigger cut in premiums because they have been unable to pass on the additional costs to end-users as demand wanes.

 

This might slow business even further in the coming weeks as producers are already struggling with recent record high copper prices, said traders.

 

Codelco is the world's largest copper producer and the annual premiums it sets serve as the industry benchmark worldwide.

 

Fundamentals Don't Support Current High Prices

 

Global usage of refined copper from January to July fell 1.2% on year, according to latest figures from the International Copper Study Group, or ICSG.

 

While Asia was the only region to show an increase in demand, usage was up just 4% during the first seven months of this year. Demand rose 15% on year in China and 10.5% on year in India, but these were offset by declines in Japan, South Korea and Taiwan, where usage fell by 7%, 10% and 11% respectively.

 

In Japan, for example, demand for copper tubes and pipes, which are used in air conditioners, has fallen as the industry has been hit by cheaper air-conditioning units from China, according to the Japan Copper and Brass Association.

 

So copper's recent record prices have been driven purely by speculation, not demand, and in fact, global demand has been depressed by high prices, said Merrill Lynch analyst Daniel Roling.

 

While some bulls are banking on post-hurricane reconstruction, Roling warns of current low demand levels in the U.S. market and "reconstruction activity may bring copper (only) to normal demand levels, revealing the clearer fundamental situation".

 

ABN Amro analyst Nick Moore also notes the possibility of end-users substituting copper with other materials like plastic.

 

"With regard to substitution, at this stage it is more anecdotal, but we believe talk of substitution will eventually translate into hard statistical evidence that copper demand growth has been damaged by the persistently high copper price resulting in substitution," Moore said in a report last week.

 

Meanwhile, copper supply is catching up with demand. According to latest ICSG figures, the global copper market deficit between January and July fell by more than 500,000 tons on year, and global refined production in the same period rose 4.8% on year.

 

Nothing much has changed fundamentally for copper to rise 33% in five months, said Calyon analyst Maqsood Ahmed.

 

"We hold firm that this market is made up from nothing more than hype, rumor, greed and the fear of missing out," added Ahmed.

 

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  • 3 weeks later...

DJ Comex Copper Pre-Open: Up 100 Pts.; Record High In London

DOW JONES NEWSWIRES

 

 

 

High-grade copper futures in New York are called to open around 100 points

higher on Thursday, said traders.

 

In London overnight, three-months copper hit a fresh record high of $4,182.50

a metric ton. The metal has been helped by follow-through buying after it

recovered from initial weakness on Wednesday, one trader said. Another

commented that copper is likely to remain underpinned until uncertainty

regarding a short position held by China's State Reserve Bureau is cleared up.

 

Analysts at Barclays Capital noted that while much of the market focus lately

has been on a missing Chinese trader and speculation about whether the SRB will

export metal, copper's supply/demand fundamentals remain constructive. "Global

industrial production remains strong," they note, pointing out that Singapore

and Taiwan reported stronger-than-forecast growth in gross domestic product.

 

In other markets that have the potential to impact metal in the short term,

the euro is up slightly to $1.1691 from $1.1669 late Wednesday afternoon. The

New York Board of Trade's U.S. dollar index is down 13 ticks to 92.20.

 

In screen trading ahead of the pit open, the December S&P 500 futures are up

3.40 points to 1,238.10. December crude is up 29 cents to $58.17 in overnight

activity.

 

A heavy slate of U.S. economic data is on the calendar for Thursday. Reports

include:

 

-- October housing starts at 8:30 a.m. EST, forecast to fall 2.8% to an

annualized rate of 2.05 million;

 

-- first-time weekly jobless claims, also at 8:30 a.m. EST, expected to dip

2,000 to 326,000;

 

-- October industrial production, forecast to rise 1.0% while capacity

utilization moves up to 79.6% from 79.0% in September; and

 

-- the Philadelphia Federal Reserve's November business index, expected to

come in around 17.0, compared to 17.3 in October.

 

No major reports are due out on Friday.

 

On Wednesday, Comex December copper fell as far as $1.8950 after China's

State Reserve Bureau indicated it was seeking permission to export 200,000

metric tons. The market later recouped its loss, however, to settle up 30

points at $1.9350. Traders linked the rebound to uncertainty about whether

China would actually undertake the exports, as well as strength in the precious

metals and short covering after downward momentum stalled.

 

First notice day for December copper is Nov. 30. Traders have reported that

some market participants have begun rolling forward positions.

 

Inventories of copper in London Metal Exchange warehouses rose 675 metric

tons Thursday, leaving them at 64,350 metric tons. Comex stocks once again

remained at 3,690 short tons Wednesday afternoon.

 

 

 

 

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In reply to: trader10 on Friday 18/11/05 02:35am

This could be interesting.After hearing of "the situation" in China the commentator on ABC newsradio this morning commented about a "Nick Leeson" type problem possibly.

It sounded off the cuff but worth watching.

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  • 3 weeks later...

In reply to: balance on Friday 18/11/05 11:27am

Been a few articles about the copper stuff up , here's one from miningmx.com........

 

The copper price has increased by nearly a third so far this year to record levels of more than $4,100/t on the London Metals Exchange and some analysts believe it could hit $5,000/t next month.

According to the Dow Jones news service, metal dealers say that a trader at ChinaÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢s State Reserve Bureau ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã‚¡ÃƒÆ’‚¬Ãƒâ€Â¦ÃƒÆ’¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã¢â‚¬Å“ which manages BeijingÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢s strategic stock of commodities ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã‚¡ÃƒÆ’‚¬Ãƒâ€Â¦ÃƒÆ’¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã¢â‚¬Å“ suddenly disappeared from the scene after building up a large short position.

 

The trader, Liu Qibing, well known in metal market circles, sold an estimated 200,000 tons short ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã‚¡ÃƒÆ’‚¬Ãƒâ€Â¦ÃƒÆ’¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã¢â‚¬Å“ in other words, for later delivery ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã‚¡ÃƒÆ’‚¬Ãƒâ€Â¦ÃƒÆ’¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã¢â‚¬Å“ in the hope that prices would fall in the meantime and that he could then buy in at cheaper prices. That would have meant a profit for the bureau. But now the tables have been turned and the bureau is in a fix, allegedly because it canÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢t deliver and prices have since shot up.

The Chinese tried to save the situation by announcing that they were going to sell 20,000 tons immediately and that they had reserves of 1.3 million tons. However, that had exactly the opposite effect on the market, the reason being that analysts estimate that there are hardly 300,000 tons available.

 

As UBS London, analyst Robin Bahr put it: "If they have so much copper why donÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢t they simply deliver? In addition, the bureauÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢s activities are usually shrouded in secrecy. So why now all of a sudden make an announcement and, especially, reveal its reserves?"

 

China is the worldÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢s largest consumer of copper, especially because of the rapid rate at which its infrastructure is expanding.

 

The market seems to think that the only thing that the bureau is trying to achieve with its unusual announcement is to force prices down so that it can close the short positions at lower prices and in that way limit a serious loss.

 

Even more suspicious is LiuÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢s sudden disappearance. Enquiries to the bureau receive the reply that ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’â€Â¦ÃƒƒÂ¢Ãƒ¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…âہ“he doesnÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢t work hereÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚ÂÂ. A spokesman isnÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢t even prepared to admit that he used to work there.

 

In Shanghai, market players say that Liu is hiding at home. In reply to the question whether China has sufficient reserves to close its short positions, they say they donÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢t know. However, one of them said that even if it had enough it was uncertain whether China would be able to physically deliver on time in London.

 

Analysts say the crucial date is 21 December, when short sellers from more than three monthsÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢ ago must deliver. ItÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢s against that background that copper and copper companies are now seen as the best place for speculators.

 

The Chinese got themselves into a similar corner when they sold zinc short on a large scale in 1997. The market realised they couldnÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢t deliver and prices were pushed up so much that the Chinese lost nearly R5bn, while many speculators made fortunes.

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  • 1 month later...

china copper news.......

 

China copper prices traded at substantial discount to LME

copper following government sales last year, but with pause in auctions,

domestic copper prices have picked up on tight supply, says local trader; "since

domestic prices are now around the same as the cost of importing, consumers are

starting to import again." Shanghai copper's recent fall attributed to talk of

rising imports but inch up again today on concerns supply still not enough to

meet demand as consumers stockpile ahead of week-long Lunar New Year holidays.

Shanghai benchmark April contract last +CNY290 at CNY43,620/ton.

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