Lme Copper Soars On Tightness, Highest In 3 Weeks
Copper surged to its highest levels in three weeks on Friday morning as nearby supplies tightened further and speculators went on a buying spree ahead of next week's options expiry.
Three months prices sliced through two barriers in hectic trading, settling at $1,986 per tonne, up $42 from Thursday's kerb close.
Profit taking took the froth off the top of the market, which hit $1,990 on the kerb, well within striking distance of the psychological $2,000 level.
It was the highest since September 5, when the market peaked at $2,037, but collapsed and ended the day at $1,925.
'We expect the screws to tighten further, one trader said, referring to continued healthy stocks falls after a decline of 9,300 tonnes on Friday. Good offtake has been seen in warrant sales which will feed through into more stock draws, traders said.
Tightness was already being felt in the cash/threes spread which widened to a $8 backwardation during trading, compared to the level status at Thursday's afternoon close.
The options expiry next Wednesday was also seen as a short-term bullish factor, with one large US investment house said to hold a long position in $2,000 calls and prepared to push underlying prices higher to force hedging.
The reaction to copper's rise was muted, however, among most of the other metals.
Aluminium barely moved, finishing the morning kerb at $1,418, up $2 from Thursday, after stocks rose by 4,050 tonnes.
The upside was seen difficult as forward selling was expected to cap any rise towards $1,420 resistance, the high of September 20.
Another recent high of $1,439 was seen as the next hurdle.
Alloy finished stronger at $1,255 versus $1,243/48.
Lead gained $6 to $788 but failed at the $790 resistance level after 1,475 tonnes were added to inventories.
Zinc finished the morning $5 firmer at $1,027, but was reluctant to confront $1,030 resistance. Stocks fell by 800 tonnes.
Tin edged back above the $6,100 level, with last kerb business she said in a commentary.