SINGAPORE, Aug 27 (Reuters) - Copper prices in Shanghai
rose nearly 2 percent on Monday following sharp gains in late
London trade on Friday ahead of a long weekend, and positive
data from the United States.
Solid U.S. housing and durable goods numbers on Friday
helped ease fears about a repeat of the paroxysms in world
credit markets that have cast a pall over the outlook for
global growth and corporate profits.
The data were reflected in equity markets in the region.
MSCI's measure of Asia Pacific stocks excluding Japan
(.MIAPJ0000PUS: Quote, Profile, Research) was up 2.1 percent at 0700 GMT. The index rose
almost 11 percent last week in its biggest weekly gain on
record, according to Reuters data going back to Dec. 31, 1987.
Aluminum Corp of China (2600.HK: Quote, Profile, Research) surged more than 30
percent to HK$21.40, after earlier setting a fresh record.
Jiangxi Copper (0358.HK: Quote, Profile, Research) rose around 20 percent to also hit a
record high.
Dual Shanghai-Hong Kong listed shares are rocketing on
expectations that mainland investors will pile into Hong
Kong-listed shares trading at a discount to their
mainland-listed counterparts.
Shanghai's most active November contract (SCFX7: Quote, Profile, Research) was up 1.8
percent or 1,190 yuan at 65,690 yuan ($8,681) a tonne at the
close.
"Physical demand looks good, with premiums for imported
copper rising. That could mean that there are expectations that
there won't be much stock around come September," a dealer in
Shanghai said.
He added that should London Metal Exchange prices rally
above $7,500, consumers would withdraw from the market.
"If prices get above $7,500, it will rip the bottom out of
consumer demand."
Copper for delivery for three months on the London Metal
Exchange (MCU3: Quote, Profile, Research) closed on Friday at $7,310, up $50, ahead of
the three-day weekend in the United Kingdom. In late electronic
dealing, prices rallied further to $7,470.
The market reopens on Tuesday.
"Metals are still pretty sensitive to the problems in
financial markets and to credit constraints," ANZ analyst
Andrew Harrington said.
"People are looking for the next hiccup -- someone having
trouble rolling debt or problems at a bank, for example. That
could overshadow commodity prices but for now it looks like
markets have settled down a little," he said.
The risk of massive defaults on subprime mortgages and
heavy debts now poses a bigger threat to U.S. economic
prosperity than terrorism, a panel of U.S. business economists
said.
"The combined threat of subprime loan defaults and
excessive indebtedness has supplanted terrorism and the Middle
East as the biggest short-term threat to the U.S. economy," the
National Association for Business Economics said. [nN24366189]
A spate of data is due this week, notably U.S. existing
home sales, Midwest manufacturing, consumer confidence and U.S.
GDP numbers. (ECON: Quote, Profile, Research)
"There is a pretty busy data schedule for the next couple
of weeks. Those will add a lot of flavour to people's
expectations and could mean more volatility if they surprise,"
Harrington said.
Shanghai zinc (SZNX7: Quote, Profile, Research) rose 1.7 percent or 460 yuan to
27,420, but dealers said prices would be capped by weak spot
demand.
Australian zinc miner Zinifex Ltd (ZFX.AX: Quote, Profile, Research) posted a 24
percent rise in full-year net profit due to record high prices
for its zinc and lead, sending its shares up nearly 5 percent.
Melbourne-based Zinifex said output of zinc concentrate was
expected to grow in the current fiscal year as new mines come
onstream. [ID:nSYD225877]
Shares in Zinifex were up 2.7 percent at A$17.20.
Shanghai aluminium (SAFX7: Quote, Profile, Research) was half a percent higher at
19,480 yuan.
China produced 5.943 million tonnes of aluminium products
in the first seven months of this year, Pan Jiazhu, secretary
general of the China Nonferrous Metals Industry Association,
told a conference on aluminium held in Shanghai on Monday.
"On the basis of these figures, we can say China's output
in 2007 will possibly exceed 10 million tonnes," Pan said.
And much of that metal is making its way onto world
markets, especially in South Korea, where traders have talked
of significant rises in stocks of aluminium products.
[nPEK255599]
In industry news, global miner Rio Tinto Ltd/Plc
(RIO.L: Quote, Profile, Research)(RIO.AX: Quote, Profile, Research) said it has received U.S. antitrust clearance
for its $38.1 billion acquisition of Canadian aluminium maker
Alcan Inc (AL.TO: Quote, Profile, Research).
The U.S. approval follows Canada's Quebec Province
government approval for the takeover earlier this month.
[ID:nSYD217201]
Metal Prices by 0700 GMT:
Metal Last Change Pct Move End 2006 Pct chg
07
SHFE Cu* 65690.00 1180.00 +1.83 60080.00
9.34
SHFE Alum* 19480.00 100.00 +0.52 20550.00
-5.21
COMEX Cu** 336.50 0.00 +0.00 287.10
17.21
SHFE Zinc* 27420.00 460.00 +1.71 28915.00
-5.17
** 1st contract month for COMEX copper
* 3rd contact month for SHFE aluminium, copper and zinc
SHFE zinc began trading on March 26, 2007
($1=7.567 yuan)
rose nearly 2 percent on Monday following sharp gains in late
London trade on Friday ahead of a long weekend, and positive
data from the United States.
Solid U.S. housing and durable goods numbers on Friday
helped ease fears about a repeat of the paroxysms in world
credit markets that have cast a pall over the outlook for
global growth and corporate profits.
The data were reflected in equity markets in the region.
MSCI's measure of Asia Pacific stocks excluding Japan
(.MIAPJ0000PUS: Quote, Profile, Research) was up 2.1 percent at 0700 GMT. The index rose
almost 11 percent last week in its biggest weekly gain on
record, according to Reuters data going back to Dec. 31, 1987.
Aluminum Corp of China (2600.HK: Quote, Profile, Research) surged more than 30
percent to HK$21.40, after earlier setting a fresh record.
Jiangxi Copper (0358.HK: Quote, Profile, Research) rose around 20 percent to also hit a
record high.
Dual Shanghai-Hong Kong listed shares are rocketing on
expectations that mainland investors will pile into Hong
Kong-listed shares trading at a discount to their
mainland-listed counterparts.
Shanghai's most active November contract (SCFX7: Quote, Profile, Research) was up 1.8
percent or 1,190 yuan at 65,690 yuan ($8,681) a tonne at the
close.
"Physical demand looks good, with premiums for imported
copper rising. That could mean that there are expectations that
there won't be much stock around come September," a dealer in
Shanghai said.
He added that should London Metal Exchange prices rally
above $7,500, consumers would withdraw from the market.
"If prices get above $7,500, it will rip the bottom out of
consumer demand."
Copper for delivery for three months on the London Metal
Exchange (MCU3: Quote, Profile, Research) closed on Friday at $7,310, up $50, ahead of
the three-day weekend in the United Kingdom. In late electronic
dealing, prices rallied further to $7,470
The market reopens on Tuesday.
"Metals are still pretty sensitive to the problems in
financial markets and to credit constraints," ANZ analyst
Andrew Harrington said.
"People are looking for the next hiccup -- someone having
trouble rolling debt or problems at a bank, for example. That
could overshadow commodity prices but for now it looks like
markets have settled down a little," he said.
The risk of massive defaults on subprime mortgages and
heavy debts now poses a bigger threat to U.S. economic
prosperity than terrorism, a panel of U.S. business economists
said.
"The combined threat of subprime loan defaults and
excessive indebtedness has supplanted terrorism and the Middle
East as the biggest short-term threat to the U.S. economy," the
National Association for Business Economics said. [nN24366189]
A spate of data is due this week, notably U.S. existing
home sales, Midwest manufacturing, consumer confidence and U.S.
GDP numbers. (ECON: Quote, Profile, Research)
"There is a pretty busy data schedule for the next couple
of weeks. Those will add a lot of flavour to people's
expectations and could mean more volatility if they surprise,"
Harrington said.
Shanghai zinc (SZNX7: Quote, Profile, Research) rose 1.7 percent or 460 yuan to
27,420, but dealers said prices would be capped by weak spot
demand.
Australian zinc miner Zinifex Ltd (ZFX.AX: Quote, Profile, Research) posted a 24
percent rise in full-year net profit due to record high prices
for its zinc and lead, sending its shares up nearly 5 percent.
Melbourne-based Zinifex said output of zinc concentrate was
expected to grow in the current fiscal year as new mines come
onstream. [ID:nSYD225877]
Shares in Zinifex were up 2.7 percent at A$17.20.
Shanghai aluminium (SAFX7: Quote, Profile, Research) was half a percent higher at
19,480 yuan.
China produced 5.943 million tonnes of aluminium products
in the first seven months of this year, Pan Jiazhu, secretary
general of the China Nonferrous Metals Industry Association,
told a conference on aluminium held in Shanghai on Monday.
"On the basis of these figures, we can say China's output
in 2007 will possibly exceed 10 million tonnes," Pan said.
And much of that metal is making its way onto world
markets, especially in South Korea, where traders have talked
of significant rises in stocks of aluminium products.
[nPEK255599]
In industry news, global miner Rio Tinto Ltd/Plc
(RIO.L: Quote, Profile, Research)(RIO.AX: Quote, Profile, Research) said it has received U.S. antitrust clearance
for its $38.1 billion acquisition of Canadian aluminium maker
Alcan Inc (AL.TO: Quote, Profile, Research).
The U.S. approval follows Canada's Quebec Province
government approval for the takeover earlier this month.
[ID:nSYD217201]
Metal Prices by 0700 GMT:
Metal Last Change Pct Move End 2006 Pct chg
07
SHFE Cu* 65690.00 1180.00 +1.83 60080.00
9.34
SHFE Alum* 19480.00 100.00 +0.52 20550.00
-5.21
COMEX Cu** 336.50 0.00 +0.00 287.10
17.21
SHFE Zinc* 27420.00 460.00 +1.71 28915.00
-5.17
** 1st contract month for COMEX copper
* 3rd contact month for SHFE aluminium, copper and zinc
SHFE zinc began trading on March 26, 2007
($1=7.567 yuan)
