Shanghai copper up

Shanghai copper prices ticked higher on Monday, supported by a steadier tone in London, and while prices may continue to test lower, tight supplies will limit downside risks. The February copper contract, the most active on the Shanghai Futures Exchange, was up 100 yuan at 54,880 yuan ($7,440) a tonne at the close.
Analyst Yang Jun at China Futures said that prices were likely to test support several times for the remainder of the year, but added: "Prices will not have much room on the downside due to tight supplies of copper concentrate."
Spot copper prices in Shanghai were up 75 yuan, trading between 57,750 yuan and 57,950 yuan. China's imports of unwrought copper rose 12 percent in November from October to 132,634 tonnes as a tight market opened a window for imports late in the month.
Imports in the first 11 months of the year came to 1.59 million tonnes, up 85.6 percent from a year earlier, Customs figures showed on Monday. Copper for delivery in three months on the London Metal Exchange eased $20 to $6,525 a tonne at 0700 GMT. On Friday, copper briefly touched $6,470, the lowest since November 22, before recovering to close slightly up on the day.
"The yen is falling against the dollar, which is dampening Asian interest across the metals," a dealer in Tokyo said. "The market is winding down for the holidays and in such a quiet time, I expect some downward pressure and copper could try to breach the $6,430 chart point, especially if the dollar continues to climb."
The dollar hit a two-month high against a basket of currencies on Monday, extending gains from last week after a surprisingly big rise in US consumer prices quelled some expectations for deeper Federal Reserve rate cuts. Against the yen, the dollar was at 113.02 yen, drifting away from a five-week high of 113.60 yen reached on Friday.
Markets will be watching for more data from the United States this week, in particular a series of housing numbers, growth and personal consumption and expenditure this week. "The numbers out of the United States this week should be pretty important. We are still looking for direction and interest rate policy is likely to be a big factor," a dealer in Singapore said.
"I think we may see some strength though, before the end of the year. There is good consumer buying here and below the market, and there is always the risk of fund window dressing that might push prices up," he added.
Australian zinc producer Zinifex Ltd launched an all-cash bid worth up to A$775 million ($668 million) for nickel miner Allegiance Mining, the latest in a hectic round of industry consolidation.
The market is also waiting for the next step in a game being played out between BHP Billiton, whose $140 billion all-share offer for Rio Tinto was spurned by Rio's board.
Shares in Allegiance, whose biggest shareholder is China's largest nickel supplier, Jinchuan Group of China, leapt 42 percent on the offer which is still being considered by the target and its stakeholders. Nickel prices eased $50 to $26,450, about half of May's record high, but well above long term average prices.
Shanghai's February zinc contract eased after a 2.1 percent decline in London on Friday. Shanghai zinc was down 320 yuan to 17,550 yuan. LME zinc was down $15 at $2,310 on Monday.