Copper prices remain bullish

Copper prices remain bullish
By Chiwoyu Sinyangwe
Wed 30 Dec. 2009, 04:00 CAT

INTERNATIONAL copper prices have continued to remain bullish, retreating to US $7,265 after earlier climbing to $7,273, its highest level since early September last year.

And the local foreign exchange market has witnessed relative stability with the kwacha maintaining a trading level of between K4, 650 and K4, 670 against US dollar, driven mainly by lack of activity from most corporates on festive season break. According to information from key international commodity markets, copper rose on speculation that demand would strengthen and drain stockpiles.

“The strength in copper is likely to continue at least through January, as sentiment is very optimistic and so far there doesn't seem to be any major news that would alter the trend,” said Guo Yong, an analyst at Jinrui Futures.

“Investors are paying very little attention to fundamentals these days – it’s mainly the investment demand that's pushing copper prices up. Spot copper isn’t selling well, consumers still think the current prices are too high.”

And according to the Zanaco Treasury Newsletter, the kwacha continued to hover around K4640 to K4, 660 against US dollar while the market saw a few players.

“The market is expected to continue experiencing low activities as most corporate businesses are on industrial break,” Zanaco stated. “In the short term the kwacha is likely to remain stable, trading in the K4, 640 to K4, 670 per US dollar band.”

Zanaco stated that there had been a steady increase in the liquidity levels in the market while Bank of Zambia continued staying out of the market through its open market operations (OMOs).

“The banks aggregate current account balance closed at K632.4 billion from K551.5 billion the previous day,” stated Zanaco. “The volumes of interbank funds traded also decreased slightly from K89.5 billion the previous day to K84.0bn while overnight weighted average interbank lending rate remained unchanged at 4.20 per cent.”