Higher London Metal Exchange prices and lower stock levels lifted Shanghai copper prices on Monday, but market sentiment is jittery as prices remain near record highs. "This market is due for a correction. Otherwise, if it stays like this for too long, we'll have no more consumers," said a trader with a Chinese metals firm. Shanghai's most-active June contract closed at 31,530 yuan, up 370 yuan or one percent from Friday's close.
The May contract closed up 330 yuan at 32,140 yuan. Last week, benchmark Shanghai copper futures hit an all-time high of 32,280 yuan. Spot copper prices rose an average of 130 yuan to between 33,800 and 34,120 yuan on Monday, following a 3,265-tonne drop in exchange warehouse stock levels.
But traders continue to report stocks in bonded warehouses are being diverted elsewhere in Asia, as domestic prices are lower than the cost of importing at prices tied to the LME. Three-month copper on the London Metal Exchange had traded at $3,278.50 a tonne on Monday, up less than one percent from $3,252.50 at the same time on Friday. Shanghai aluminium futures also rose on higher LME prices, with most-active June at 16,920 yuan, up 90 yuan from Friday's close. Volume fell to 18,890 lots, from 56,466 lots on Thursday.
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