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Copper prices soar

NEW YORK: Short covering pushed COMEX copper prices high enough to prompt funds to take on fresh positions against a background of continuing physical market tightness in the US, traders said.

By midday, most-active May had soared to its highest level in nearly four weeks.

Brokers noted that although COMEX is still at a premium to LME, this could change if there are strikes at copper operations in Chile where new labour contracts are being negotiated.

"There is a good chance that a strike in Chile could happen, which would make the backwardation in London widen out, causing London to go up faster than New York", a broker said.

At 1230 EDT May COMEX was up 2.60 cents at 118.00 cents, traded 118.30 to 115.50 cents. Spot April was up 2.30 cents at 118.10 cents.

Several producers and traders noted that the physical market in the US remains relatively healthy compared to Europe and Asia, with premiums firming up slightly and producers sold out of rod, the main product.-Reuter