Shanghai Copper Rises as Processors Buy Before Lunar New Year

Jan. 13 (Bloomberg) -- Copper futures rose in Shanghai on demand from local cable and wire makers who are building stockpiles before the Lunar New Year holiday.

Processors in China, the world's biggest consumer of the metal, need to buy copper now as they usually maintain operations during the week-long holiday that starts Jan. 28. High prices for immediate delivery show that supply in China isn't enough to meet demand, said trader Yuan Fang.

``The strong cash prices indicate that some processors are still buying,'' said Yuan, a metal trader with Shanghai Dongya Futures Co. ``The gains in Shanghai may draw more imports next month, but processors need the copper now,'' she said.

Copper futures for delivery in March 2006 rose 90 yuan, or 0.2 percent, to settle at 43,870 yuan ($5,437) a metric ton on the Shanghai Futures Exchange.

Metal for immediate delivery at Changjiang, the biggest spot market for copper in Shanghai, rose as much as 850 yuan, or 1.9 percent, to a record 46,680 yuan a ton today. The premium for copper imports was unchanged at 1,000 yuan over the January futures contract.

On the London Metal Exchange, copper for delivery in three months was bid at $4,555 and offered at $4,560 a ton at 3:02 p.m. Shanghai time. It fell 0.5 percent yesterday to $4,543 a ton.

Copper for delivery in March rose 0.75 cent, or 0.4 percent, to $2.0950 a pound at 3:02 p.m. Shanghai time on the Comex division of the New York Mercantile Exchange in after-hours trade.

To contact the reporter for this story: Chia-Peck Wong in Singapore at cpwong@bloomberg.net