Shanghai copper futures were steady on Monday and London futures touched a fresh near-five month high, while zinc prices jumped more than 2 percent, rallying on heavy arbitrage buying. Accounting for China's value added tax and import duty, Shanghai zinc futures traded at a premium of around 300 yuan to LME metal.
Copper, exempt from import duty but attracts VAT, was at a discount of almost 900 yuan in China versus London. Trading was expected to slow this week due to a market holiday in Japan on Monday and Chinese holidays from Wednesday to Friday. China will also be shut for a week from October 1.
Benchmark third-month Shanghai copper closed 150 yuan higher at 60,250 yuan. "Copper looks unstoppable - in fact most commodities are rallying hard," said a Sydney-based trader. "The supply situation in copper especially looks acute as we reap the cutbacks resulting from the global financial crisis."