BLBG: Shanghai Copper and Zinc Futures Jump by 6 Percent Daily Limit
Copper and zinc futures jumped by the daily limit in Shanghai, tracking moves in London, on speculation index funds will buy more industrial metals this month to reflect annual re-weightings of the benchmarks they follow.
Copper gained as much as 6.4 percent on the London Metal Exchange on Jan. 2, while zinc climbed as much as 7.5 percent on speculation funds tracking the Dow Jones-AIG Commodity Index may make purchases. The Shanghai exchange opened for trading today after closing Dec. 31 for the New Year holidays.
“China is just catching up on moves in the international markets last week,” Yang Zhenqiang, an analyst at Yide Futures Brokerage Co., said today from Tianjin.
Copper for March delivery on the Shanghai Futures Exchange rose 6 percent from the previous settlement price to 24,810 yuan ($3,636) a metric ton. Zinc in Shanghai also surged the 6 percent daily limit to 10,550 yuan a ton.
Standard & Poor’s said Nov. 3 it would increase the weightings of lead, nickel, zinc and New York-traded copper in its S&P GSCI index from 2009. New weightings announced by Dow Jones & Co. in August take effect this month.
LME copper fell 1.5 percent to $3,184 a ton, and zinc slipped 2 percent to $1,255 a ton at 11:25 a.m. in Singapore.
“Demand is definitely going to be weaker this year but I expect some stockpiling ahead of the Lunar New Year to prop prices up in the first few weeks,” said Yang. The five-day holiday begins in China on Jan. 26
Mining Stocks
The surge in metal futures triggered gains in related equities today. Yunnan Tin Co., the world’s biggest producer of the metal, gained 7 percent to 10.10 yuan at 11:25 a.m. in Shenzhen after rising as much as 9.3 percent.
Jiangxi Copper Co., the nation’s second-largest producer, gained 2 percent to HK$6.40 in Hong Kong and 7 percent to 10.68 yuan in Shanghai at the same time.
Aluminum Corp. of China Ltd., the nation’s biggest producer, gained 4.6 percent to HK$4.76 in Hong Kong and 4.9 percent to 6.45 yuan in Shanghai.
Among other LME-traded metals, aluminum fell 0.3 percent to $1,565 a ton, nickel lost 4.6 percent to $12,600, and tin was down 1.7 percent at $11,425. Lead gained 0.9 percent to $1,100 a ton as of 11:25 a.m. Singapore time.
