BLBG: Copper and Zinc in Shanghai Surge By 5% Daily Limit on Outlook
Copper and zinc futures jumped by the exchange-imposed daily limit in Shanghai on speculation stimulus plans around the world will boost growth and increase demand for industrial metals.
Asian nations including China and India have pledged more than $685 billion on spending programs to revive their economies. U.S. Treasury Secretary Timothy Geithner will announce the Obama administration’s financial-recovery plan tomorrow, a day later than planned.
“Sentiment is improving, and investors are getting a bit more hopeful in their outlook for the months ahead,” Wang Zheng, a trader at Everbright Futures Co. said in Shanghai. “Everything is going up and metals are going along for the ride.”
Copper for April delivery on the Shanghai Futures Exchange climbed 1,400 yuan, or 5 percent from the previous settlement price, to 29,510 yuan ($4,318) a metric ton. April-delivery zinc in Shanghai also surged the 5 percent limit to 10,920 yuan a ton.
London Metal Exchange copper gained as much as 3.6 percent to $3,669 a ton, the highest since Dec. 1, and traded at $3,600 a ton at 3:19 p.m. Singapore time.
“We’re also seeing optimism from the possibility of state buying,” said Wang. China’s State Reserve Bureau has started buying copper from domestic bonded warehouses and the overseas market, according to news reports last week.
Shanghai inventories, based on a survey of five warehouses monitored by the exchange, gained 11,986 tons to 28,553 tons last week, according to a report on its Web site. That is the biggest tonnage increase since February 2008.
Package Delay
Still, copper may drop this week if there are delays to the U.S. government’s spending program. Twelve of 22 analysts, investors and traders, or 55 percent, surveyed by Bloomberg News said copper would drop. Seven people, or 32 percent, expected a gain and three were neutral.
“The only thing that can break copper to the upside is the successful passage of an economic stimulus bill,” said Donald Selkin, chief market strategist at National Securities Corp. in New York.
Among other LME-traded metals, aluminum was up 0.5 percent at $1,475 a ton, zinc added 2.1 percent to $1,210, lead rose 0.8 percent to $1,195, nickel advanced 3.5 percent to $11,905, and tin gained 0.5 percent to $11,250 as of 3:19 p.m. in Singapore.
