MARKET TALK: New Copper Shorts Still Building - Macquarie

Though LME 3-month copper up $75 at $6,710/ton with traders citing news of labor strike at Xstrata's Altonorte mines, new shorts in recent months "an important driver of lower prices" overall, says Macquarie Research (prices down from $8,100 early September). Macquarie cites recent data from LME, Comex CFTC commitment of traders' report as suggesting "building of new shorts in copper has continued" - pointing to firming belief of more downside in coming months. Adds scrap copper supply, which comprises over 30% of world supply of metal, up sharply in 2006; "in a year when mine production has been well below plan, scrap has come to the rescue and filled the gap."