Shanghai copper up

Shanghai copper rose almost 2 percent on Monday, shrugging off warnings from China that it will take further steps to cool the economy, and instead focused on threats to supply and limited world stocks. The most-active August copper contract on the Shanghai Futures Exchange rose 1.9 percent to 64,310 yuan ($8,435) a tonne, from 63,130 yuan on Friday.
On Thursday, Chinese Premier Wen Jerboa said the government would tighten policy further to tamp down the economy. The market expects at least a 0.27 percentage point interest rate hike in coming weeks. Urban fixed-asset investment rose 25.9 percent from a year in the first five months of 2007, accelerating from 25.5 percent growth in January-April, the government said on Friday.
"The market is still ranging, but investors are somewhat encouraged by China's imports of refined copper, which are expected to decrease further in June," analyst Cai Luoyi at China International Futures said.
China imported 129,949 tonnes of refined copper and copper alloy in may, down from 205,053 tonnes in April. Imports for the first five months hit 876,099 tonnes, up 130.1 percent from a year. Rising imports have pushed stocks of copper in Shanghai up three-fold to just short of 100,000 tonnes as the market struggles to absorb the record influx of metal.
Copper for delivery in three months on the London Metal Exchange fell $10 to $7,490 a tonne, after rallying 0.5 percent on Friday. A growing number of supply threats is putting pressure on declining stocks of metal in LME warehouses, which now stand at 117,900 tonnes or just over four days of world consumption. Inventories are down 45 percent from a three-year high in February.
Anglo-Swiss minor Strata Plc declared force major at its Canadian Copper Refinery in Montreal last week after most of the plant's workers went on strike. The plant produces around 300,000 tonnes of copper per year and the company hopes to run the smelter at 35 percent of capacity during the walkout.
Contract talks at Chile's Collahuasi, one of the world's largest copper mines, stalled on Friday with time running out for the mine and union workers to reach a deal, while subcontract workers at other Chilean mines said support was growing for a strike they are planning.
Christian Crevasse, a spokesman for the group of 30,000 subcontract workers at Codelco, said no date has been set for the strike, although June 21 has been suggested. "You are going to know when the strike starts, because it's going to be massive," Crevasse told Reuters.
In Peru, workers at Southern Copper Corp's two copper mines and a smelter will go on strike beginning June 23 and have presented documents to the company and government officials declaring an indefinite strike. However, a strike at Argentina's top aluminium producer Allure ended on Friday after a weeklong stoppage. LME aluminium was down $8 at $2,742, but August aluminium in Shanghai rose 60 yuan to 19,640 yuan.