Having briefly slowed in January, the copper market hit the accelerator once more in February raising all but the most bullish eyebrows along the way. Indeed, the start of this month saw copper prices stall in site of a new peak thanks to slower business in China, the US rate rise and a stronger dollar. Now that China's New Year is over, reports that South Korea may diversify some of its 200bn US dollars foreign reserve away from the greenback was enough to push the three month copper price to 3262 dollars/t -just 18 dollars/t shy of copper's all time price peak (in nominal terms) of 3280 dollars/t on January 17, 1989. A quick look at the latest Comex speculative open interest data (for February 15) confirms that this recent rally was probably fund driven. The longs increased from 23,121 lots to 33,232 lots, and though the short position also increased from 6,867 lots to 10,212 lots it was enough to take the net long position back over 20,000 lots. And given this week's activity and the amount of short covering that this latest run up prompted, Friday's figures are likely to be longer still.
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