Copper futures rise amid hopes for new stimulus

Copper futures rose Friday on the Shanghai Futures Exchange (SHFE), partly because investors are anticipating measures from the Chinese government to support growth following a batch of poor economic data recently, according to a report Friday by London-based metal information provider Metal Bulletin (MB).

The most-traded copper contract for delivery in June closed at 46,450 yuan ($7,536) per ton, up 720 yuan or 1.6 percent from Thursday. This was also a rise of 2.8 percent week-on-week. The trading volume increased by 75,620 lots compared to Thursday's 439,616 lots.

"The latest poor economic data has fueled hopes that the government will come up with stimulus measures, while the coming peak season for copper consumption has also helped spot prices stabilize and boosted futures prices," Xu Maili, director of metal research at Everbright Futures in Shanghai, was quoted as saying by the MB report.

However, the copper market is not likely to see a sustained rise in the long term, due to global problems such as tepid economic growth and oversupply of copper, as well as decreasing demand in the Chinese market, according to a report Thursday by Henan-based Futures Daily.

China is the world's biggest consumer of base metals such as copper. Concerns over the country's economic downturn and sliding demand have weighed on prices in recent months, the Futures Daily report said.

By March 21, 2014, copper storage at SHFE-registered warehouses had reached 209,901 tons, an increase of 83,052 tons from December 27, 2013.

Meanwhile, copper storage at China's bonded warehouses has also increased since October last year, reaching around 800,000 tons in early March, according to data released on March 12 by Citrine Capital Management LLC, a metals hedge-fund company.

The large storage in China will put pressure on the real copper consumption market, the Futures Daily report said.