The LME copper contract for 3-month delivery plunged after failing to break to 200-Day MA of 4940 (Mar 15 close: 4819). Currently trading around 4700 level, the base metal retreats as dollar rebounds as well as China's stockpiling is near completion.

Base metals have surged strongly since the beginning of 2009. LME Metal Index rose 36% as led by the 70% rally in copper price. Despite the recent outperformance, we would like to emphasize that such rally was not support by demand/supply outlook.

The key reason for bidding up copper price has been China strategic reserve buying. While it remain uncertain as at what amount the Chinese Government would like to buy, year-to-date figure showed that current purchase is around 200-300K tons. In other parts of the world, demands are still sluggish. In the US, copper shipment was down 40% yoy in February, while in Japan, import declined 45% yoy during the month.

At the copper conference in the Chilean capital Santiago, the CRU copper group said that global copper demand should fall by 15 20% yoy in 2009 due to the sharp decline in consumption in the US and European construction and automobile markets.

The dollar rose for the 4th days against the euro after ECB President Trichet said that the central bank must do whatever it can to boost economy and 'any ambiguity in our medium-term policy direction would delay the return of sustainable prosperity, because that would undermine confidence, which is the most precious ingredient in the present circumstances'.

The weak economic data in the 16-nation region accompanied with diverged opinions from policymakers made the market worried that the Eurozone may take longer to get out of recession. The dollar surges to 1.3036 against the euro, the highest level since March 19.

Crude oil price rebounds to 50.68 in European session as led by rise in stock markets. In Asia, the MSCI Asia Pacific Index added 0.6% and Japan's Nikkei 225 Stock Average gained 1.7% to close at 8907.6 after Toshiba, the biggest semiconductor maker in Japan, reported a less-than-expected operating loss. In Europe, UK's FTSE 100 Index adds 1.1% to 4096.5 as driven by surges in banking stocks. Germany's DAX and France's CAC 40 also climb by almost 1%.

Gold price extends yesterday's weakness and is currently trading at 871 as stock prices rise and diminished inflationary pressure. Released earlier, Canada's CPI eased to +0.2% mom and +1.4% yoy in March, compared with +0.7% mom and +1.4% yoy in the previous month. In Switzerland, SNB Chairman Roth said the central bank will continue to curb inflation and directly intervene the Swiss Franc whenever necessary. These news weighed on gold and other precious metals as the appeal as inflation hedge reduced.