Thu Mar 1, 2012 2:45am EST
Wednesday's scramble out of risk assets, including copper,
was fuelled by U.S. Federal Reserve chief Ben Bernanke's
comments that the U.S. economy needs to strengthen, to cut the
still high jobless rate further, and the absence of indications
of more Fed bond purchases.
That countered the positive impact from the half a trillion
euros in additional liquidity the European Central Bank injected
into the financial system to help fight a nagging debt crisis.
But a continued draw in LME copper stockpiles suggests "that
physical demand is higher than many market participants
believe", Credit Suisse said in a note.
"We expect the price path in the coming days to be volatile.
Nevertheless, price risks are to the upside," the bank said.
Copper stocks in warehouses monitored by the LME fell to a
fresh 2-1/2 year low of 296,425 tonnes on Wednesday, down 2,425
tonnes. The ratio of cancelled warrants, material tagged for
delivery, to total stocks stood at 31.69 percent, mostly in U.S.
locations.
In contrast, stockpiles of copper at warehouses monitored by
the Shanghai Futures Exchange CU-STX-SGH remained near 10-year
highs at more than 216,000 tonnes, despite dropping slightly
last week for the first time since early December.
Global miner Rio Tinto said it
expects the copper market to stay tight despite growth in
supply, with the company anticipating rising costs and supply
disruptions to continue, following strikes last year.
...
http://www.reuters.com/article/2012/03/01/...ls-idUSL4E8E10YH20120301 |
