Farallon Resources Ltd. (fka FRLIF)

[the cork]

Lead up, Copper Gains in Shanghai, London as China Curb Concern Eases; Zinc Jumps
By Bloomberg News - Nov 17, 2010 11:41 PM PT

Copper in Shanghai rallied after falling 11 percent in four days and London prices extended yesterday’s gains as China’s clarification on price controls improved investor confidence and as the dollar weakened.

February-delivery metal on the Shanghai Futures Exchange climbed 1.9 percent to close at 62,720 a ton. The three-month delivery contract in London advanced 1.5 percent to $8,310 a ton at 3:10 p.m. in Shanghai. Zinc gained 3.6 percent to $2,189.

“As news about how Beijing plans to curb inflation came out, it helped to alleviate the policy uncertainties, giving some relief to the market,” Ren Gang, an analyst at Maike Futures Co., said by phone from Shanghai.

China’s State Council said on its website yesterday that price caps will be used on “important daily necessities” and production materials if necessary, following a meeting chaired by Premier Wen Jiabao. The cabinet pledged to stabilize natural gas prices, crack down on speculation in farm products and ensure the supply of vegetables, grain, cooking oil and sugar.

“Short-position holders chose to lock-in profits, and the relatively low open interest and trading volumes amplified the price move,” Ren said. “We need to wait for a few days to see how the physical markets react.”

Cash Market

Copper traded on Changjiang, Shanghai’s largest nonferrous metals market, was quoted around 62,050 yuan a ton today, or a discount of 50 yuan to 150 yuan to Shanghai’s front-month futures contract.

China sold 16,353 tons of lead ingots offered at a state auction on Nov. 16, the National Development and Reform Commission said in a statement on its website today. The metal was sold at an average price of 17,030 yuan a ton, it said.

The U.S. currency declined against 13 of its 16 major counterparts on speculation the Federal Reserve will follow through on its stimulus plan to buy $600 billion in bonds. The Dollar Index, which tracks the greenback against a basket of currencies, dropped as much as 0.5 percent to 78.699.

“Following the steep losses in the past few days, the dollar’s retreat since yesterday seems to be at least partially and temporarily offsetting the tightening worries,” said Li Peiying, an analyst at Essence Futures Co., by phone.

Aluminum in London rose 1.1 percent to $2,300 a ton, and lead gained 2.2 percent to $2,314 a ton. Nickel increased 1.6 percent to $21,889 a ton, and tin advanced 2.6 percent to $25,400 a ton at 3:10 p.m. in Shanghai.

http://www.bloomberg.com/news/2010-11-18/copper-climbs-in-shanghai-little-changed-in-london-after-drop-zinc-gains.html