COMEX copper rose to a one-month high at the open on Thursday driven up by a surge in London prices that was triggered by an advance in the Asian market where a temporary supply squeeze sparked the rally, traders said.
One trader explained that a squeeze for prompt material in China caused a rally in Shanghai, then a rally in London that pushed LME copper through a key level at $2,800 per tonne. At $2,800 buy stops forced traders to either cover short positions of take out long positions that attracted even more business.
Once COMEX opened in New York, buy orders immediately propelled December futures through $1.30 a lb, which set off more fund and speculative buying.
"The fundamental squeeze is because of a bureaucratic backlog, and has prompted some technical buying. It's a temporary shortage created by the inability to get material clear of customs," said one New York dealer.
Comments
Comments are closed.