Boosted by the new issuance news, shares of Yunnan Copper hit the daily limit of 10 percent to 28.82 yuan apiece yesterday. The surge was seen not only in Yunnan Copper, but also swept the whole non-ferrous metal sector, which rose 1.07 percent.

Since the beginning of the year, copper in Shanghai has jumped 83 percent.

"Surely, the appreciation of the dollar and capital liquidity will affect the metals' prices, but the fundamental influence will be from supply and demand," said Li Li, an analyst with Qilu Securities.

During NDRC's huge restocking exercise of major metals, China reserved a total of 590,000 tons of aluminum, 159,000 tons of zinc, and 235,000 tons of copper so far, according to NDRC figures.

Meanwhile, "over the first four months, major copper refineries all showed an increase in output, and downstream industries have almost put their full capacity into operation," Li said. She said China this year would produce 3.95 million tons of refined copper, up 6 percent over 2008. In addition, there will also be large increases in refined copper import.

Xiao Zheng, an analyst at Ping An Securities, predicted that in the second half this year, the overall economic recovery would definitely help revive the non-ferrous metals and gold industries.

"This is especially the case for copper and gold. Copper prices surged the most this year while gold prices maintained its historic high," Xiao said. Gold surged above US$900 per ounce this year, and experts expect that prices would climb to US$1,000 per ounce within the year.

(China Daily July 24, 2009)