Copper Rises in London, N.Y., on Speculation Demand to Increase
2006-10-06 09:08 (New York)
By Claudia Carpenter
Oct. 6 (Bloomberg) -- Copper rose for a second consecutive
day on speculation demand is increasing fast enough to erode
global inventory.
Stockpiles monitored by the London Metal Exchange dropped
0.3 percent to 114,050 metric tons, the lowest since Aug. 16,
figures today from the exchange showed. Even with increased
production next year, global inventory at the end of 2007 will
be half the supply of 2002, Mitsui & Co. said in a report today.
``All eyes will remain on stock movements in the coming
weeks to determine the price direction,'' said Alex Heath,
director of base metals trading in London at RBC Capital
Markets, a trader on the London Metal Exchange. ``This is the
restocking period.''
Copper for delivery in three months rose $11, or 0.2
percent, to $7,310 a metric ton at 1:38 p.m. on the LME, after
rising 3.8 percent yesterday. The metal is still down 3.1
percent this week, heading for the first weekly drop in three.
Copper for delivery in December gained 2.5 cents, or 0.8
percent, to $3.325 a pound on the Comex division of the New York
Mercantile Exchange. A futures contract is an obligation to buy
or sell a commodity at a fixed price for a specific delivery
date. Copper has lost 3.8 percent for the week, after gaining in
each of the previous two weeks.
The LME benchmark contract needs to stay above $7,000 a ton
for the rally to continue, said Roy Carson, a London-based
trader at Triland Metals Ltd., one of the 11 traders on the
floor of the LME.
U.S. Housing Slowdown
Prices may drop next week on speculation that a slowdown in
U.S. housing demand will curb consumption by the world's second-
largest user of the metal.
Six of 12 analysts, investors and traders surveyed by
Bloomberg yesterday forecast copper will decline next week. Four
expected a gain and two predicted little change.
U.S. Federal Reserve Chairman Ben S. Bernanke said Oct. 4
the housing market is in a ``substantial correction'' that will
lop about a percentage point off economic growth in the second
half and restrain expansion next year. An average family house
contains 400 pounds of copper, found in wires and pipes.
Nickel gained $450, or 1.6 percent, to $29,350 a ton in
London. That's close to $29,900 a ton traded Aug. 22, the
highest since 1987.
Nickel, used as an alloy in stainless steel production, has
more than doubled this year as production of stainless steel
expanded.
Nickel Consumption
Consumption will jump 10 percent this year to 1.37 million
metric tons, the Lisbon-based International Nickel Study Group
said today. It will rise to 1.45 million tons next year.
The INSG data show stainless-steel makers haven't been
deterred by rising nickel prices. Production of stainless steel
may jump 14 percent this year, the International Stainless Steel
Forum said on Oct. 4.
Refined-nickel production will rise to 1.35 million tons
this year, from 1.29 million tons, the group said. That will
increase to 1.45 million tons next year.
Aluminum rose $5.50 to $2,547 a ton and lead gained $15 to
$1,410. Tin advanced $50 to $9,100 and zinc jumped $80 to $3,520
a ton.
--With reporting by Chanyaporn Chanjaroen in London. Editor:
Wallace (dje) |
