Copper Climbs to 5-Week High on Dollar; Lead Trades at Record
By Simon Casey
Nov. 18 (Bloomberg) -- Copper prices rose to a five-week high
in London as the dollar fell to a record low against the euro,
making the metal cheaper for holders of the European currency.
Lead futures rose to a record.
The dollar touched $1.3075 against the euro, according to the
EBS electronic currency dealing system, on speculation central
banks may be unable to stem its decline. Copper inventories in
warehouses monitored by the London Metal Exchange fell more than
2 percent for second day, extending a 14-year low.
`It's the dollar,'' Roy Carson, a trader at Triland Metals in
London, said in a telephone interview. ``Everything else is
supportive. Stocks are down.''
Copper for delivery in three months rose $50, or 1.7 percent,
to $3,073 a metric ton on the London Metal Exchange at 9:56 a.m.
It has climbed 12 percent since Oct. 14, recovering from an
11 percent plunge the previous day that was the biggest in 16
years. Prices peaked at a 15-year high of $3,179.50 on Oct. 11.
``There is now a growing concern that little will be done to
slow dollar's slide against the euro,'' Tony Yu, a metals analyst
at Standard Bank in London, said in an e-mailed report. The dollar
has dropped 7.3 percent against the euro in the past two months
and traded today near a seven-month low against the yen.
Finance ministers and central bank governors from the world's
biggest economies probably won't be able to persuade U.S. Treasury
Secretary John Snow to support the dollar when they meet this
weekend in Berlin. Snow yesterday in London said the history of
government efforts to influence currency values ``is at best
unrewarding and checkered.''
Stockpiles Shrink
The dollar's drop made copper easier to buy and more
appealing as an investment as supplies of the metal dwindle.
Stockpiles in LME warehouses dropped to 63,875 tons, the lowest
since May 1990, bringing the past year's slide to 87 percent
because of rising demand from makers of wiring, tubing and other
products in China and the U.S., the two biggest users.
Global copper demand will rise 6.6 percent this year to
16.5 million tons, beating production from mines and scrapyards by
603,000 tons, Barclays Capital in London forecast last month.
China is turning about one-third of its copper into cable and
wiring for its power grid. Copper in the U.S. is used mostly in
construction. U.S. housing starts rose 6.4 percent in October to
an annual rate of 2.027 million residential units, the Commerce
Department said yesterday.
Lead Soars
Lead for deliver in three months rose $20, or 2.1 percent, to
$980. The metal used to make car batteries reached $996, the
highest since the contracts began trading on the LME in 1987.
``Stocks are very low,'' Carson said.
LME inventories have slid 68 percent in the past year to
45,775 tons as consumers withdraw metal because of forecasts that
demand will outpace production.
Consumption this year will rise 2 percent to 5.17 million
tons, the International Lead & Zinc Study Group said yesterday,
surpassing output by 130,000 tons.
Most other LME metals also rose. Aluminum was up $3 to
$1,819, zinc climbed $19 to $1,157 and tin added $75 to $9,100.
Nickel alone fell, losing $100 to $14,300.
--With reporting by Matt Chamber sin Melbourne, John Brinsley in
Tokyo, and Rodrigo Davies and Matthew Craze in London. Editor:
Farr |
