Copper Prices Rise as Inventory Drops for 9th Straight Session
2005-03-22 09:37 (New York)
By Claudia Carpenter and Jennifer Itzenson
March 22 (Bloomberg) -- Copper prices in New York rose as
inventories of the metal used in homes and appliances declined
for a ninth straight session to the lowest in seven weeks.
Supplies in warehouses approved by the London Metal Exchange
fell to 47,325 metric tons, the lowest since Feb. 1. Stockpiles
have dropped 8.8 percent since March 9. Prices climbed to a 16-
year high of $1.521 a pound on March 8 after global demand grew
faster than refined supplies, forcing manufacturers to use their
own stockpiles.
``Lower inventories are always supportive of higher
prices,'' said Charles Bradford, an analyst at Bradford Research
in New York. Copper consumption will probably grow about 4
percent this year, leading to a supply deficit of 200,000 tons,
Bradford said.
Copper futures for May delivery rose 1.6 cents, or 1.1
percent, to $1.505 a pound at 9:36 a.m. on the Comex division of
the New York Mercantile Exchange. Prices have climbed 11 percent
in the past year. A futures contract is an obligation to buy or
sell a commodity at a set price by a specific date.
Copper for immediate delivery in Shanghai rose to the
highest in 11 years on demand from makers of pipes, wire and
cables. Inventories monitored by the Shanghai Futures Exchange
fell 8.1 percent to 36,872 tons as of March 17, the lowest in a
month.
China, the world's biggest copper consumer, imported 29
percent less of the metal in February than a year earlier because
of cheaper local prices and the Lunar New Year holidays.
``We see this trade data as very supportive of our view that
Chinese demand shall be a strong positive force through the
second quarter, following a major drawdown of domestic inventory
in recent months,'' Barclays Capital in London said in a report
today.
Copper prices surged 39 percent last year as demand soared
in China, the U.S. and Japan, pushing inventories to a 16-year
low.
``China has been a big issue'' in copper, Bradford said.
Signs of demand in February were ``pretty decent,'' he said.
--With reporting by Helen Yuan and Rob Delaney in Shanghai.
Editor: McKiernan |
