Shanghai copper fell on Friday ahead of a long weekend, after the US unveiled lower-than-estimated GDP figures for the first quarter and a surprise jump in the number of unemployment benefits claims. The most active Shanghai copper contract, July, dropped 1.2 percent to 69,200 yuan by 0707 GMT, and was on track for a 2.1 percent monthly fall, its second consecutive decline.
"It's the last trading day before a long weekend, and somehow the mood always turns cautious on a day like this," said Shanghai CIFCO Futures analyst Zhou Jie. "Also, the LME is not open, and that takes out the traders who may be looking to buy copper on Shanghai to take advantage of the current arbitrage." Shanghai copper is trading at a discount of 1,578 yuan to London, taking into account China's 17 percent VAT.
"If there are no negative macroeconomic policies announced over the weekend, I think Shanghai copper should be due for a rebound next Tuesday. But for now, the market is still concerned about the tight credit conditions in China and the weak US economy," Zhou added. The May copper contract on Comex in New York dropped 0.6 percent to 421.95 cents/lb ($9,302 a tonne). The London Metal Exchange copper three-month delivery contract closed flat on Thursday, its last trading day of the month, at $9,320.
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