Copper Rises on Expectations Lower Rates Will Spur Building
New York, Dec. 6 (Bloomberg) -- Copper rose for a fourth
session on speculation that demand will pick up as wire and pipe
manufacturers prepare for the spring building season.
Expectations of lower interest rates in the months ahead are
fueling hopes that the construction industry, the biggest user of
copper products, will step up purchases. Federal Reserve Chairman
Alan Greenspan yesterday suggested the Fed may reduce rates if the
economy continues to slow.
``Greenspan's comments are a big plus for the copper
market,'' said Vincent Rego, chairman and chief executive of
McKinney, Texas-based Encore Wire Corp., which uses about 25
million pounds of copper a month. ``There's nothing wrong with
demand already.''
Copper for March delivery rose 0.85 cent, or 1 percent, to
87.75 cents a pound on the Comex division of the New York
Mercantile Exchange, the contract's highest closing price since
Oct. 17. Prices are up 8 percent from a four-month intraday low of
81.3 on Nov. 17.
In London, copper for delivery in three months rose $4 to
$1,878 a metric ton (85.18 cents a pound) on the London Metal
Exchange, the highest since Oct. 24.
Sales of new U.S. homes this year are already on track for
the second-best year on record, a report from the Commerce
Department showed Monday. The average single-family home contains
400 pounds of copper, according to the Copper Development
Association.
Greenspan said the Fed's six interest rate increases in the
past year and a half helped slow the pace of economic expansion
``appreciably.'' Copper prices are down 7 percent from a three-
year high reached in September on expectations that slower growth
in the U.S. economy would reduce demand for copper.
Lower interest rates may send copper prices as high as $1 a
pound next year, Rego said.
Global demand for refined copper is forecast to reach 15.07
million metric tons this year, exceeding world production of 14.76
million tons, according to the Lisbon-based International Copper
Study Group, sponsored by 24 nations and the European Union.
--Claudia Carpenter in the New York newsroom (212) 318-2346 or at
ccarpenter2@bloomberg.net /wb
My comment
The difference between demand and production according to this is 310,000 tonnes. This is more than Zambia produces in total. Copper prices are GOING UP. |
