US copper futures climbed up an 11-week peak at the open Friday with firmer overseas markets providing further support to this week's technical breakout, traders and analysts said.
Copper for September delivery rose 4.45 cents or 1.2 percent to $3.7065 per lb by 10:26 am EDT (1426 GMT) at the New York Mercantile Exchange's COMEX division, near the upper end of its morning range between $3.6475 and $3.7150 which marked its highest level since May 7.
Copper futures prices in Shanghai surged their 4-percent daily limit Friday, buoyed by growing physical demand in the domestic Chinese market and prospects of continued economic strength following Thursday's staggering 11.9 percent second quarter growth rate.
"Yesterday's strong momentum is spilling over into today's session, where we are again seeing advances across the board," said Edward Meir, metals analyst with Man Financial. A firmer technical backdrop has contributed to the market's overall weekly gains, with technicians citing Wednesday's key reversal from support near $3.52 for the red metal's recent bout of strength.
New resistance in the September copper contract was now seen at around $3.76, which represents a break above a multi-month trend line, followed by the May 4 contract peak at $3.7790. "All of these metals seem to be turning back up. I think the shorts are running for cover and the people who are looking at the charts and black boxes are getting long," said a New York-based futures commission merchant. Volume was estimated at 5,330 lots by 10:00 am.
Fundamentally, falling global stockpiles, labour disruptions in Chile, and expectations that China's appetite for the industrial metal will continue to be strong heading into the second half of the year have all contributed to the market's recent breakout, analysts said.
The market's overall tightness was reflected in the latest monthly bulletin from the International Copper Study Group which showed world refined copper consumption outpaced production by 267,000 tonnes in the first four months of the year, compared with a surplus of 35,000 tonnes in the year-ago period.
Comments
Comments are closed.