Base metals News ...(what's with all the CAA knobs on here ??)
Base metal prices on the rise
ALFRED CANG
Reuters
January 31, 2008 at 7:19 AM EST
SHANGHAI — Shanghai copper rose 1 per cent on Thursday, anticipating higher consumption after the Lunar New Year holidays, while zinc futures gained after much of China's zinc industry was laid low by severe winter weather.
The April copper contract the most active on the Shanghai Futures Exchange, closed up 600 yuan at 61,130 yuan, about $8,511 (U.S.) a tonne on Thursday.
“Shanghai copper is gaining as consumption of the metal usually picks up after the Chinese Lunar New Year holidays,” said analyst Cai Luoyi at China International Futures.
Mr. Cai said consumption of copper and aluminum, key raw materials for the power and construction industries, would also be supported by efforts to rebuild Chinese infrastructure devastated by heavy snowfall in the central, eastern and southern parts of the country.
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China's worst-ever power shortage and severe winter weather have combined to decimate production of a host of metals in some Chinese provinces, benefiting zinc, lead and aluminum prices in particular.
Shanghai's most-traded April zinc gained 1.8 per cent or 350 yuan to 19,930 yuan a tonne, after a 2 per cent gain in the previous session.
Three-month London Metal Exchange zinc futures were up $5 at $2,355 at 7:00 a.m. GMT.
“There is certainly going to be some upside pressure on zinc. The outages in China are short term, but zinc has underperformed and this will help by providing some upside pressure,” Mark Pervan, senior commodity analyst at ANZ, said.
“LME stocks are still rising so you can't get too bullish, but this will help offset that.”
Copper for delivery in three months on the LME rose $50 to $7,210 a tonne.
“Copper looked a little cheap this morning considering the Fed cut. We have seen a little short-covering out of China and some light consumer buying from Japan,” an LME dealer in Hong Kong said.
“The longer prices stay up here, the more likely we are to see a rally. Dips should be bought, though scale-up selling will emerge towards $7,300,” he said.
The Federal Reserve cut U.S. interest rates by a hefty 50 basis points on Wednesday in the latest attempt to avert a recession in an economy hit by a housing slump and a credit crunch.
The April aluminum contract on the Shanghai Futures Exchange rose 140 yuan to 19,530 yuan a tonne at Thursday's close, while LME aluminum gained $19 to $2,660.
The Shanghai Futures Exchange said late on Wednesday that it would raise the margin requirements for trading in copper, aluminum, zinc and rubber to 8 per cent, starting from the settlement on next Monday, but will keep margins on gold and fuel oil unchanged.
The exchange would lower the margins to normal levels on February 13's settlement. The adjustment is being made to control trading risks, it said.
The Shanghai exchange would suspend trading from Feb. 6 to Feb. 12 for national holidays.
Australian alumina producer Alumina Ltd reported a 15 per cent fall in full-year profit, hit by higher operating costs, including energy and a strong Australian dollar.
But it said global demand for primary aluminum would grow at about 10 per cent this year, driven by strong demand from China.