Concerns over excess copper supply weighing on investor sentiment

Copper for delivery in February rose by 0.22 percent on the Shanghai Futures Exchange Friday, closing at 50,600 yuan ($8305.36) per ton, up 0.26 percent week-on-week. Trading volumes decreased by 31,538 lots Friday compared to Thursday.

Investors have become concerned about a surplus in copper supply, especially as demand remains weak, both globally and in the domestic market.

According to data released by the National Bureau of Statistics in early November, production of refined copper in China hit a record high of 637,958 tons in October, up 22.9 percent from a year earlier and a rise of 2.9 percent month-on-month.

Meanwhile, spending on electricity in October continued to fall year-on-year, indicating that demand for copper is also likely to continue falling, according to a report by Xinhua News Agency Thursday.

Last week, concerns over excessive supply and sluggish demand weighed on the prices of base metals.

However, the benchmark three-month copper contract on the London Metal Exchange closed at $7,055 per ton Friday, increasing 0.5 percent from the previous day.

The rise was largely due to a weaker dollar, which was a benefit for non-US investors, according to a report by Reuters Friday.

In addition, investors' confidence was lifted by a drop in eurozone unemployment in October. It was the first fall since 2011, and an indicator of a potential economic recovery in the eurozone, according to a report e-mailed to the Global Times Friday by Australian bank ANZ.

However, analysts are still cautious over the outlook for the global copper market. "We are in a bear market. I think we'll have a smallish surplus this year and a slightly bigger one next year. There's more downside over the next nine months, but in the shorter term there's clear tightness of one kind or another," BNP Paribas analyst Stephen Briggs was quoted as saying by Reuters Friday.