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Comex copper ends sharply higher

NEW YORK: Comex copper surged higher with LME on short covering on Thursday, fuelled by talk of a large LME stock drawdown tomorrow, traders said.

The market has gained 5.75 cents in two days, though some believe it may have now peaked. Early gains prompted funds to buy new positions, some traders believed.

"There is talk about a lot of LME stock coming out of Singapore which would indicate good Asian buying," said Mike Frawley of Dean Witter.

Some doubted if the surge will continue or if all the gains were from short covering. "I am telling the physical buyers to hold off," a trader said.

More conservative estimates from brokers and analysts suggested LME stocks would fall 4,000 to 6,000 tonnes.

May Comex settled 3.40 cents higher at 118.80 cents per lb, traded 119.00 to 115.50. Volume was strong at an estimated 15,000 lots, versus yesterday's 12,418 lots.

The drawn-out labor talks at Chuquicamata mine and physical tightness in the U.S. were also on traders' minds.

"The most important thing is the expanding economy, and the more that takes hold, the market can move considerably higher," said Bette Raptopoulos of Prudential Securities.

PHYSICAL COPPER

Based on settlement prices, merchant copper cathodes for April shipment were quoted at a nominal 121.95 to 122.20 cents a lb. No. 2 scrap copper was quoted at a nominal 98.00 cents a lb, up 2.0 cents from April 10th.-Reuter