Kelvin Chambwa
22 December 2005
Lusaka — MARKET analysts anticipate the price of copper may fall this week on speculation gains that have driven the metal to high records this year are overdone.
And the price of copper on the London Metal Exchange (LME) this week started on a still high level though slightly lesser than last week's close, a situation attributed to nervousness on the market in view of year-end profit taking.
According to a survey conducted by Bloomberg News last week, nine of 20 analysts, traders and investors surveyed said the metal would drop this week. Eight said copper would rise and three predicted little change. The metal, used in wiring and plumbing, has gained 42 per cent on the London Metal Exchange this year. The copper gains to record highs in recent weeks had been partly attributed to a rumoured large loss-making gamble by a trader working ultimately for China's State Reserves Bureau.
According to information from the LME, three months copper ended at US $4,450 a tonne on Monday from US $4,455 at close of business last Friday.
However, by Tuesday this week, the price of copper had dropped to US$4,425 per tonne, a drop of about US$25 from Monday's opening levels, true to the prediction. It is however yet to be seen at what margin the copper price would end at when this week finally comes to a close.
The price of copper was generally unchanged last week at US $4,455. The metal traded at a record US $4,475 on December 9 and had hit an all-time high of US $4,478 earlier this month. Pre-holiday trade and the looming delivery date for a rumoured short position has however ensured that the price still remains high at the above US $4,400 margin.
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