Copper Reaches Record for 2nd Day in London on China's Demand
2005-04-12 05:06 (New York)
By Chanyaporn Chanjaroen
April 12 (Bloomberg) -- Copper futures climbed to a record
on the London Metal Exchange for a second day on concern that
demand in China, the world's largest consumer, will exceed new
supply.
Copper for delivery in three months reached $3,329 a metric
ton, the highest since the contract began trading in its current
form in 1986 and $9 more than yesterday's peak. The metal was up
$5, or 0.2 percent, to $3,319 at 10:07 a.m. London time.
``The demand factor has been in the market for 18 months and
certainly that drove prices higher,'' Robert Barham, an analyst
at IFX Markets Ltd. in London, said by phone. ``A strong close
yesterday also encouraged commodity trading advisers,'' or funds
that base trading on charts.
Copper futures in Shanghai also rose to a record for a
second day, gaining 2.3 percent to 33,620 yuan ($4,062) a ton.
The contract settled at 33,290 yuan. China's $1.6 trillion
economy expanded 9.5 percent in 2004, spurring demand for copper
used in electrical wiring and plumbing pipes.
Rising stockpiles at warehouses monitored by the LME and
the Shanghai Futures Exchange probably won't bring down prices,
Barham said. LME inventory has risen 8 percent this month to
48,900 tons, still 71 percent less than a year ago. Of the total,
about 9,225 tons, or 19 percent, is already sold, according to
the exchange.
Rising Production
Mining and smelting companies such as China's Jiangxi Copper
Co. and London-based Vedanta Resources Plc are producing more
copper to meet demand and benefit from record prices. Jiangxi
Copper said yesterday first-quarter profit rose 41 percent to
465.6 million yuan as sales surged 66 percent.
Jiangxi Copper will get 20,000 tons of the metal this year
from its $120 million investment in a copper and gold mine in
Pakistan, Chairman He Changming said.
Vedanta, India's biggest copper refiner, increased output 89
percent in the six months through March to 162,137 tons after
buying the Konkola copper mine in Zambia, the company said today
in an e-mailed statement.
Copper production will still fall short of a demand for a
third year, with the global deficit shrinking to 275,000 tons,
said Robin Bhar, an analyst at Standard Bank in London.
Other LME-traded metals were little changed. Aluminum was up
$2 at $1,974 a ton and nickel gained $25 to $16,200. Tin rose $25
to $8,225 and zinc was unchanged at $1,380. Lead hadn't traded.
--Editor: Farr |
