Shanghai copper rose for the third straight day on Thursday, while London futures eased, but sentiment remained supported by hopes that the demand slump seen since August 2008 could be reaching a bottom. Sentiment is firming on a string of better than expected data, fuelling hopes the worst of the economic downturn may be over and of the return of buyers to the market.
China is buying copper to gradually triple its state reserves to about 1 million tonnes, trade sources said. South Korea also plans to boost base metal reserves ahead of an expected economic recovery later this year.
"There are good reasons for the Chinese government to buy right now - the same arguments used by South Korea. More optimism is creeping into the market, helped by economic data and although things are still quite weak, they don't seem to be getting any worse," Yingxi Yu, analyst at Barclays Capital said.
Comments
Comments are closed.