[miningmx.com] — LONDON Metal Exchange (LME) copper rose to a record high of $9,437.50 a tonne on Wednesday when trade resumed after the Christmas break.
Copper for delivery in three months on the LME stood at $9,395 per tonne during early morning trade, up from $9,300 at the kerb close on Thursday and $9,345 at the end of Friday’s shortened trading session.
“We have seen a lot of optimism come out of the United States. It’s probably not warranted. We have year-end window dressing, not just in copper, but oil and equities. I am more interested in what happens in the first few weeks of 2011,” said Jonathan Barratt, managing director at Commodity Broking Services in Sydney.
“The data has been mixed at best. China is trying to slow, and the net effect suggests quarter one will be a time of consolidation and lower prices. Weak economies will have to withstand the onslaught of surging commodities. I think
everything will be OK, but one shouldn’t discount bumps in the road.”
Underpinning copper’s strength in the near term is the closure of Chile’s Patache port terminal – which has blocked exports by No. 3 copper miner Collahuasi – and a supply deficit expected in 2011.
International metals prices saw some support after the People’s Bank of China fixed the yuan’s mid-point versus the dollar on Wednesday at 6.6247, slightly stronger than Tuesday’s 6.6252 and close to a record high.
In other metals, LME zinc rose 2.3% from Thursday’s kerb close to $2,351, while aluminium gained 1% at $2,457. Towards the end of Friday’s abbreviated session, the two metals traded at $2,308 and $2,410 respectively.
Traders said there was some concerns that the tailing off of China’s measure to stimulate its economy set in motion during the 2008 to 2009 financial crisis, and an attempt to curb inflation – most recently, the Christmas Day interest rate
rise – would depress demand.
But investors in China’s automakers at least were unfazed by the end of tax incentives for small cars on January 1.