Shanghai copper futures touched their weakest in almost four years on Wednesday, chasing sharp losses overnight in London on gathering gloom about the global economy. Analysts said the longer-term outlook remained bleak with plenty of room for further falls in copper prices, despite a modest bounce in London and a late recovery by Shanghai on Wednesday.
"This isn't the end of the downtrend. There is still room for copper and some of the other metals to fall," Judy Zhu, analyst at Standard Chartered Bank in Shanghai, said. "The package for China looked good at first glance and government spending will help... but our most positive forecast calls for a rebound in the second half of 2009 but that may be pushed out to 2010," Zhu said.
London Metal Exchange copper rose $60 or 1.7 percent to $3,700 a tonne at 0730 GMT. In the wake of the Beijing announcement prices surged 11 percent before the rally fizzled. The benchmark Shanghai contract fell 80 yuan to 29,240 yuan. Shanghai copper earlier dipped to 28,600 yuan, its lowest since January 2005. The World Bank slashed its 2009 growth forecast for developing countries, adding to the tide of negative news sending copper tumbling 6 percent on Tuesday, despite an 8 percent rise in Chinese copper imports in October.
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