Copper Steady in London on Investor Optimism Over Demand
By Stuart Wallace
Oct. 14 (Bloomberg) -- Copper was little changed in
London, halting a three-day decline, on investors' optimism
that demand from China and other buyers of the metal is
still rising.
China will use about 10 percent more copper this year
than in 2003, BHP Billiton, the world's biggest mining
company, said yesterday. That will further erode stockpiles
that have dropped 80 percent this year. Prices fell 11
percent yesterday, gathering pace as speculators sold.
``Metal prices had run up sharply since the beginning
of 2004 and more recently in the past few months,'' said S.
Naganath, chief investment officer at DSP Merrill Lynch Fund
Managers Ltd. in Mumbai. ``Some correction was inevitable
but the underlying demand still looks good.''
Copper for delivery in three months was down $5, or 0.2
percent, at $2,755 a metric ton on the London Metal Exchange
at 9:54 a.m. Yesterday's plunge was the biggest since 1988.
This week's drop had ended a five-week rally that had
pushed copper prices up 16 percent. Hedge funds account for
about half of trading on the LME, according to Barclays
Capital in London.
``Metals prices had been forced to unrealistically high
levels by short covering of speculative positions and a
recent bout of fund buying amid a background of strong
global demand,'' John Meyer, an analyst at Numis Securities
in London, wrote in an e-mailed note.
--With reporting by Ravil Shirodkar. Editor: A. Brown |
