MARKET UPDATE FOR 12 SEPTEMBER

Copper prices rose to one weeks highs on Friday

as hopes of stronger demand from top consumer

China revived optimism, but analysts expect global

ecocnomic weakness to cap the rally.

Copper for delivery in three months on the LME

jumped 2.6% to $7110 per tonne, the highest since

September 5, and was trading at $ 7080 a tonne at

1022 GMT from $6930 at close on Thursday.

The metl used widely in the power and construction

industries is down about 20 % since early July when

it touched a record high of $ 8940 a tonne., after which

doubts about the strength of the Chinese demand gathered

momemtum.

Copper stocks at above 203,000 tonnes , at their highest

since March last , have also been a negative for the market.

Meanwhile Freeport McMoRan Copper and Gold Inc, the

world's second largest copper producer, said supply

globally may be constrained because of lack of new

discoveries, and declining output at aeging mines.

It appears that slowing copper demand from the US

residential and automobile sectors is spreading to

commercial construction. and at the same time the

European ecomonies are also slowing.

Those factors will not curb copper demand in China

, the the biggest consumer where more people are moving into

cities, creating the need for wire and piping in new houses. It looks

like the Chinese government has sufficient funds to continue

building the infrastructure it needs to support internal migration.

Chinese foriegn exchamge reserves have swelled to a record

$1.8 Trillion as money floods in from exports , foreign direct

investment and investors abroad speculating on continued gains

by the yuan.