WSJ: Shanghai Base Metals Mixed; Aluminum Outperforms
SHANGHAI (Dow Jones)--Base metals on the Shanghai Futures Exchange were mixed Thursday, with copper falling on continued profit-taking triggered by weak local equities.
The benchmark March copper contract settled CNY540, or 0.8%, lower at CNY68,670 a metric ton.
Shanghai copper opened lower in response to a weak closing on the LME overnight as year-end profit-taking weighed on investors, and was further pushed down by negative sentiment from Chinese equity markets where tightening concerns mounted as the government steps up its efforts to limit speculative investment in the real estate sector.
"There's no market news for metals today, so it's no surprise that they took cues from the stock market," said Ying Haoliang, an analyst with Orient Securities Futures.
Analysts said strong supply-demand fundamentals and firm investment demand may help copper go up further into next year, but concerns over monetary policy tightening to stave off inflation could cap gains.
Copper traded at the Changjiang Nonferrous Metals Trading Market, a major spot metals market in Shanghai, was quoted at CNY67,650-CNY67,800/ton, lower from CNY68,200-CNY68,350/ton Wednesday.
Three-month London Metal Exchange copper ended Wednesday's afternoon kerb down $20 at $9,345/ton.
It was quoted 0.3% lower at $9,320/ton around 0700 GMT, when the SHFE closed.
Aluminum was the best performer on the complex, largely due to catch-up buying after a broad-based rally in the commodity markets recently that saw copper hit an all-time high of $9,390.25/ton and crude oil breached $90 a barrel.
Henan province has reduced electricity supply to aluminum smelters due to a power shortage, but only those who have resumed production after the power rationing from August to November will be affected, industry participants said.
"As far as I know, there is still 800,000 tons of aluminum capacity being idled, far exceeding the resumed capacity, so it's not going to have a major impact on supply-demand fundamentals," said Sun Lei, an analyst with Galaxy Securities Futures.
The province in August started power rationing to meet emission targets ahead of the end of China's 10th five-year plan.
Shanghai aluminum settled 0.3% higher while Shanghai zinc settled flat.
Wednesday's settlement prices in yuan a ton and LME late kerb prices from Tuesday in dollars a ton:
