Shanghai copper ascends

Shanghai copper futures rose by their daily limit for a third day in a row on Monday, supported by high spot premiums in the domestic market, reflecting the strong demand and tight supplies seen late this year.
The March copper contract, the most active on the Shanghai Futures Exchange, rose 5 percent from Friday's settlement to 58,460 yuan ($7,944) a tonne, hitting a three-week high for the contract.
Cai Luoyi, an analyst at China International Futures said the surging copper prices in Shanghai were due to tight supply in the domestic market and boosted by strong copper prices in London.
Copper prices rose to two-week highs on Friday in London. The London Metal Exchange is suspending trading until December 27. "With London's absence, I think Shanghai copper will be more reliant on the spot price performance in Shanghai," Cai said.
Spot copper prices in Shanghai were up 1,555 yuan on Monday, trading between 62,680 yuan and 62,930 yuan. The spot copper premium in Shanghai was hovering around 1,500 yuan, after reaching a 18-month high of 2,000 yuan last week.
"Arbitrage is seen for weeks in the futures market and spot traders are importing copper as much as their cash flows allow due to a demand boost," a Shanghai-based spot trader with an international house said.
"Some Chinese fabricators, such as air conditioner tube makers, have been building up their stocks since when Shanghai copper traded around 56,000 yuan level," he said. Shanghai copper stocks fell 668 tonnes for the week ended on Thursday, the sixth drop in a row. Inventories monitored by the Shanghai exchange have plummeted by 57 percent since early November to 25,722 tonnes last week.
COPPER IMPORTS UP:
China imported 103,410 tonnes of refined copper in November, up 5 percent from October but still slightly below traders' expectations, indicating that the country's spot market will continue to tighten.
Refined copper imports in November rose 56 percent on a year-on-year basis. "Refined copper imports in January are expected to rise remarkably on domestic demand," said analyst Shen Haihua at Maike Futures, noting that he forecast December import levels to be line with November or slightly higher.