Wednesday, January 24, 2007

Shanghai copper futures charged 3.3% higher on Wednesday as concerns grew about tight spot market supply and a major Chinese producer warned its warehouse stocks were very low.

"There is only a little refined copper in our warehouse. We are nearly empty now," Pan Qifang, a senior official at Jiangxi Copper, said.

Shanghai copper futures were sharply higher, with the most active March contract rising 1 730 yuan, or 3.3%, to 53&Nbsp;990 yuan a tonne by the midday break on Wednesday.

Jiangxi is China's largest copper producer, with an annual output of around 440 000 tonnes, most of which is sold on a long-term basis.

"Some of our mining facilities are under annual maintenance now, which I believe will impact production," Pan said.

He added that stocks were down to around 1 000 tonnes, and while the company was meeting its long-term obligations, it was unable to supply to the spot market.

A spot trader said: "Supply is short in Shanghai these days, especially for Chilean copper."

Spot copper prices in Shanghai were up 1 025 yuan, quoted between 56 650 yuan and 57 000 yuan.

"Import increases cannot meet demand in the domestic cash market as several Chinese smelters are being overhauled," Shen Haihua, an analyst at Maike Futures, said.

Copper for delivery in three months on the London Metal Exchange were $70 higher at $5 730 a tonne at 05:28 GMT.

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