Shanghai copper was little changed on Friday, ignoring London's gains in the previous session, as the lacklustre physical market dampened market sentiment and investors await clear direction. A strike by Shanghai's truck drivers in the city's busy harbour areas has caused small disruptions to the copper flow in and out of the bonded warehouses in the city, but traders do not expect a severe impact.
London copper closed the holiday-shortened week up 3.2 percent on Thursday, buoyed by a three-year low dollar. "Shanghai hasn't been following London higher, and just shows how much the LME market is about funds playing against the short dollar," said a Shanghai-based trader.
Shanghai's most-active copper futures contract ended little changed at 71,410 a tonne, a 0.8 percent weekly gain. Sentiment in the Shanghai market remained fragile on slow physical buying. "The market isn't very optimistic - at current price levels buyers just won't buy in bulk," said Lin Yuhui, deputy general manager of Jinhui Futures. "It looks like we are stuck in a range. There's limited room on the upside, but a sharp fall would also be difficult."
Truck drivers went on strike near Shanghai's Waigaoqiao port. Waigaoqiao, together with two other bonded areas in Shanghai, hold about 80 percent of China's bonded copper stocks. Stockpiles in Shanghai's bonded warehouses have been rising in the past few months and are estimated at more than 700,000 tonnes.
Rising zinc stockpiles have dampened market sentiment, and sent Shanghai zinc to its lowest in nearly five months. Shanghai third-month zinc dipped to 17,425 yuan a tonne, its lowest since early December. It closed down 1.1 percent at 17,690 yuan. LME zinc stocks have been on a steep climb since early April, up 10 percent over the past week or so to 814,300 tonnes by April 20. Deliverable stockpiles in warehouses monitored by the Shanghai Futures Exchange gained 4,746 tonnes from a week earlier.