February 8 2011 – Commodity Online: Taking advantage of gap between London and Shanghai markets, Copper futures plunged under pressure due to increased arbitrage activity in China market.
Chinese markets opened today after spring festival. During these holidays, metals prices had advanced widely on London Metal Exchange in just one week.
Base Metals dropped sharply during morning trades. Among all metals, Zinc and Lead were major losers having dropped more than 2 percent from yesterday. Base metals dropped due to extensive arbitrage activity in Chinese markets, while Silver maintained its bullish trend due to high demand in the spot market.
Dollar maintained to attempt strong weight on the price of commodities. Firmness in Dollar after arrival of China participation in market may weaken Copper trend dull for near term.
Copper prices had slightly corrected in beginning of the week. Imbalance between global manufacturing activity and consumption in industry put weight on Copper prices. Before jumping into new highs, Copper seems to be in holding mood for now.
For long run, analysts are still positive for Copper movement as US economy once again took steps to ensure the recovery tracks, growing industry demand and due to increasing supply deficit in worldwide market.
It has been also observed that Chinese investors enters into market when price trading on lower range. So there is possibility that Copper future may raise on bottom fishing activity in coming weeks