Copper Rises to Three-Year High on Signs of Stronger Demand
New York, Sept. 5 (Bloomberg) -- Copper rose almost 2
percent, reaching its highest price in three years, on signs of
strengthening demand for the metal used to make wire and pipes.
Copper inventories in London Metal Exchange-monitored
warehouses have plunged 47 percent from a record in March as
economic recovery in Asia helped boost demand. Supplies could
decline further as U.S. manufacturers return to full production
after shutdowns for summer vacations and maintenance.
``The demand side is quite strong, and we're not really
seeing any new production,'' said William O'Neill, head of futures
research at Merrill Lynch & Co. in New York. ``We're seeing strong
non-Japan Asian demand, ongoing U.S. demand, despite some data
seeming to point to a slowdown, and good European demand.''
Copper for December delivery rose 1.5 cents, or 1.7 percent,
to 91.25 cents a pound on the Comex division of the New York
Mercantile Exchange, the highest closing price for a most-active
contract since October 1997. Futures prices have risen 23 percent
from an eight-month low in April.
In London, copper for delivery in three months rose $13, or
0.7 percent, to $1,959 a metric ton (88.86 cents a pound) on the
London Metal Exchange, the highest since November 1997.
LME-monitored copper inventories fell 1,300 tons to 445,400
tons, the exchange said in its daily report. Declines were
registered in the U.S., the world's biggest user of copper, as
well as in Germany, Belgium and the Netherlands.
The declines were ``pretty well spread out,'' suggesting
strong demand in both the U.S. and Europe, said Warren Gelman,
president of Kataman Metals Inc., a brokerage in St. Louis.
Supply and Demand
Copper demand probably exceed production by least 300,000
tons this year, O'Neill said. That compares with excess supply of
550,000 tons in 1998 and 205,000 tons last year, he said.
Also boosting prices was the month-long strike by workers at
a nickel mine in Sudbury, Ontario, operated by Falconbridge Ltd.,
traders said. The mine also produces a small amount of copper ore
-- about 46,000 tons a year, or less than 1 percent of world
supply -- which is shipped to Norway for refining.
Toronto-based Falconbridge told customers Friday that they
would receive only 60 percent of the refined copper they had
ordered from the Norwegian smelter this month because of the
strike, company spokeswoman Caroline Casselman said. The company
had reduced shipments from the smelter by the same amount for much
of last month.
--Claudia Carpenter in the New York newsroom (212) 318-2346 or at
ccarpenter2@bloomberg.net with reporting by Kevin Carmichael in
Ottawa/jb |
