Copper, Aluminum Prices Gain for Fourth Day as Recovery Seen
London, Jan. 8 (Bloomberg) -- Copper and aluminum prices rose
for a fourth straight day as traders anticipated an economic
recovery in the U.S. and elsewhere will boost demand for products
ranging from water pipes to airplanes.
Copper, an indicator of economic growth, has risen 14 percent
from a 14-year low on Nov. 7 on signs of a turnaround in the U.S.
and Europe. Germany today reported a 0.9 percent rise in
manufacturing orders in November, its first increase in three
months, after a U.S. report last week showed the world's biggest
economy lost jobs in December at the slowest rate in four months.
``There's a view that demand for metals in the U.S. will
recover this year,'' said Peter Mathews, director of Black Country
Metals Ltd., a recycling company in Stourbridge, England. ``The
best estimate I've heard is the second quarter.''
Copper for delivery in three months rose as much as $22.50,
or 1.5 percent, to $1,562 a metric ton on the London Metal
Exchange, its highest since Dec. 3. Prices have jumped 7.5 percent
in the past four days.
The market for copper, worth $24.6 billion a year, lost
almost a fifth of its value in 2001 as the three top economies --
the U.S., Japan and Germany -- entered recession simultaneously
for the first time in decades. The slump prompted output cuts from
miners such as Chile's Codelco, the biggest producer, and BHP
Billiton Group.
Inventories of copper in global LME warehouses today dropped
325 tons, or 0.04 percent, their first decline in three weeks,
signaling higher demand for the metal. Last year, inventories more
than doubled as use dropped below consumption.
Aluminum
Aluminum, the most widely traded metal on the LME, climbed as
much as $12.50 or 0.9 percent, to $1,432 a ton after yesterday
posting its largest gain in a decade.
Prices of aluminum in London dropped 13 percent last year as
demand declined from aircraft manufacturers such as Boeing Co.,
who lost orders after the Sept. 11 attacks on the U.S. caused
travel to collapse. About 80 percent of an aircraft's weight is
aluminum.
Rising metals prices have helped boost shares of companies
such as Rio Tinto Plc, the third-biggest mining company, and
Pechiney SA, the fourth-largest aluminum maker. An index of five
metals and mining companies has risen 5.4 percent so far this
year, the second-best performance in the Bloomberg 500 index of
European stocks.
Evidence of a turnaround isn't yet conclusive, some analysts
said. While German manufacturing is recovering, orders in November
were still down 8.6 percent from a year ago, the Finance Ministry
reported today.
``Some people have decided the recession ends here,'' said
Robin Bhar, an analyst at Standard Bank. ``I have to question the
sustainability of the current rise'' in metals prices.
Nickel dropped as much as $110, or 1.8 percent, to $6,020 a
ton after jumping 6.4 percent yesterday to its highest level in
seven months on expectations that healthier economies will buy
more stainless steel, the main use of the metal.
Zinc fell as much as $10, or 1.2 percent, to $837 a ton after
rising yesterday to its highest level in almost four months.
--Jon Hurdle in the London newsroom (44) 207 673 2095 or
jhurdle1@bloomberg.net/chm/tc
As the bull market in metals is underway, where are the posters to this thread. Stephen O |
