Maravi

Copper prices show signs of resurgence

Copper prices show signs of resurgence
Written by Chiwoyu Sinyangwe
Monday, March 09, 2009 11:04:23 AM

COPPER prices on the international market have continued to show strong signs of resurgence closing last week trading at US $3,785 a tonne with some analysts predicting the price to hit US $4,500 band.

And the kwacha last week continued to trade in weak position against the dollar closing trading at K5, 560 and K5, 580 against the United States dollar.

According to international commodity market data, base metals prices rallied with copper hitting a near four-month high of US $3,785 dollars a tonne.

By Friday, copper for delivery in three months jumped to US $3,724 a tonne on the London Metal Exchange from US $3,420 the previous week.

"Copper prices are rebounding strongly and could yet challenge the $4,000-4,500 a tonne area but the rally is not sustainable," commodity analyst Robin Bahr commented.

"Chinese restocking is masking weak underlying global copper consumption growth and a market in growing oversupply."

And according to the Standard Chartered Bank daily market update, the local foreign exchange market had continued to hold in a very weak position against the United States Dollar.

The commentary stated that despite the fact that the Market has been short for the better part of the week, the Treasury bill auction was oversubscribed.

Standard Chartered Bank attributed the oversubscription of the treasury bills to commercial banks expecting maturities from government securities today which they intend to roll over and also that since the Bank of Zambia (BoZ) had been out of the market on open market operation (OMO).

"Since BoZ had been out of the Market on OMO, banks have been left with little choice but to invest all OMO maturities for the period in Treasury bills. The market closed K5, 560 and K5, 580 against the US dollar," stated the daily market update.

Labels: COPPER, INFLATION, KWACHA

posted by MrK @ 11:05 AM