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Copper futures surge to daily limit

By Jin Rong (China Daily)
Updated: 2006-08-08 09:22

Copper futures in China surged yesterday, driven by a price rise on international markets and news of a strike at the world's largest copper mine.

Copper for delivery in October, the most actively traded contract, increased by as much as 2,700 yuan (US$337) to 70,310 yuan (US$8,799) a ton its daily allowable limit in early trade on the Shanghai Futures Exchange.

The contract, which rose to a record 85,550 yuan (US$10,694) in May, backed off from its morning highs to close at 69,430 yuan (US$8,679), 1,820 yuan (US$228) higher than the settlement price of 67,610 yuan (US$8,451) on Friday.

"The significant price jump (on the Shanghai Futures Exchange) is largely driven by external factors on the international markets," said Ma Xi, an analyst at Shanghai-based Jinyuan Futures Brokerage Co.

"The surging price on the London Metal Exchange (LME) last Friday and the news of an imminent strike at Chile's copper mine are two principal factors pushing up the prices in Shanghai," Ma said.

Copper futures on the LME, the world's largest metal bourse, climbed 5.5 per cent last Friday.

The three-month LME copper price traded as high as US$8,030 on Monday the highest level since mid-July.

Concern that copper production could be disrupted by a strike at Escondida in Chile, the world's largest copper mine, also pushed up copper prices in Shanghai, analysts said.

"The news of a strike in the world's largest copper mine in Chile is also having an obvious impact on market sentiment, pushing up the prices in Shanghai," said Luo Hongwei, a copper trader at China International Futures Co Ltd.