Shanghai copper rises

Shanghai copper rose 1 percent on Thursday, tracking gains in London after a pledge by mineworkers in the world's third largest producer to go ahead with an indefinite strike from Monday. But investors in China were reluctant to make big bets on rising prices ahead of a weeklong holiday starting on Tuesday.
The most active July copper contract on the Shanghai Futures Exchange rose 0.85 percent, or 600 yuan, from Wednesday to 71,100 yuan ($9,210) a tonne at Thursday's noon break.
"Chinese investors are cautious ahead of the holidays. They are hesitant to buy after cutting their exposure over the past few days of price fluctuations," said analyst Cai Luoyi at China International Futures.
Prices could spike higher next week if the largest miners' federation in Peru, the world's third largest producer of copper and zinc, follows through on a vow to start an indefinite, nation-wide strike on Monday.
Union leaders at Southern Copper Corp, Yanacocha, the largest gold mine in Latin America, and zinc miner Volcano said they plan to join the nation-wide strike. Offsetting this, China's refined copper output is expected to rise in April because of an increase in copper scrap supplies, and this may weigh on world prices, industry sources said on Wednesday.
Chinese analysts worry that an ample supply of refined copper in the country, mainly due to peak imports in March, may be exacerbated as domestic fabricators use more substitutes. "Copper end-users in China have used more scrap copper and aluminium after the copper price in Shanghai broke 70,000 yuan a tonne," said analyst Huang Shoufeng at Jinni Futures.
London Metal Exchange copper for delivery in three months was flat at $7,850 a tonne. "The market is little too sanguine. Peruvian unions say the will walk out, there was an amazingly strong first quarter from China and there is a more risk to the upside than people are expecting," Andrew Harrington, analyst at Australia and New Zealand bank, said.
Investors hoping for a steer on the US economy were frustrated by mixed data on Wednesday. Orders for durable goods were up a surprisingly strong 3.4 percent to a seasonally adjusted $214.9 billion last month after a 2.4 percent February rise, but sales of new homes disappointed with a 2.6 percent rise in March to an annual rate of 858,000, below forecasts for a rate of 888,000.