bigenergybull
Subject: Chinese running down state inventories to make copper consumption look low
Copper Snaps Two Days of Declines on Demand From Wire Producers
By Chanyaporn Chanjaroen
Sept. 26 (Bloomberg) -- Copper rose in London as producers of wires and pipes bet two days of declines had left the metal cheap, given forecasts for a supply shortfall this year.
Demand for copper will exceed production by 52,000 metric tons through 2006, after a shortfall of 360,000 tons last year, according to a Sept. 18 report by Goldman Sachs Group Inc. Stockpiles of the metal monitored by the exchange are equivalent to less than three days of global consumption.
``There is no doubt that consumers are adding support to this market,'' said Peter Hickson, a London-based strategist at UBS Ltd. who has worked more than three decades in the metals and mining industry, the past 12 years as a metals analyst.
Copper for delivery in three months gained $40, or 0.5 percent, to $7,550 a metric ton at 10:56 a.m. on the London Metal Exchange. It has risen 72 percent this year, trading at record $8,800 a ton May 11.
Consumers in China, the world's largest copper-buying nation, probably used about 1 million tons of copper from their own stockpiles in the past 12 months, leaving them seeking alternative sources of the metal, Hickson said.
``The Chinese have got themselves short of copper,'' he said. Recent declines of the metal came from selling by hedge funds, he said.
Stockpiles of copper tracked by the LME increased 325 tons to 121,950 tons, the LME said in a daily report today. In China, inventory monitored by the Shanghai Futures Exchange fell to a 19-week low last week, according to the bourse's weekly report.
Nickel stockpiles dropped 312 tons to 5,724 tons, the LME said, equivalent to less than two days of global consumption. Nickel inventory has declined 84 percent this year.
Prices of nickel, used as an alloy in stainless steel, gained $300, or 1 percent, to $28,300 a ton.
Other LME-traded metals rose. Aluminum was up $7 at $2,525 a ton and lead advanced $22 to $1,362. Tin added $5 to $8,980 and zinc increased $21 to $3,420 a ton. |
