Copper and zinc futures jumped to the daily limits in Shanghai on Friday, aided by a global price surge, as traders seek refuge in commodities amid a weakening US dollar and crude oil crossing US$100 a barrel.
All copper futures contracts on the Shanghai Futures Exchange (SHFE) for 12 different delivery months soared to the daily limits shortly after opening. The most actively traded copper contracts for delivery in March reached the ceiling at 59,800 yuan per ton, up 5.1 percent from the last trading day of 2007.
All 12 zinc futures contracts on the SHFE also surged to the daily limits shortly after opening, with the most actively traded contract for delivery in March touching 20,160 yuan per ton.
On the London Metal Exchange (LME), the three-month copper futures surged 4.3 percent to close at US$7,035 per ton in pit trading on January 3. In Friday's electronic trading, the three-month copper futures on LME rose a further 1.07 percent to US$7,110, continuing the bullish trend of the past three days.
Analysts said Friday's price surge was exacerbated by a technical factor arising from an adjustment of the percentage weighting of the Dow Jones-AIG Commodity Index, a worldwide recognized benchmark index, which tracks the futures prices of 19 different commodities traded on the US exchanges and LME.
Economists and analysts also attributed the recent base metal rally to the brighter-than-expected US economic outlook for 2008.
Analysts said anticipation of China's increasing demand in base metals in 2008 could also help maintain the longer-term momentum of the price increase.
(China Daily January 5, 2008)