Copper Prices Climb as China's Consumption Expected to Increase
2005-05-09 11:12 (New York)
By Claudia Carpenter
May 9 (Bloomberg) -- Copper prices in New York rose for a
third day on speculation of rising demand from manufacturers in
China, the world's biggest buyer of the metal used in appliances
and computers.
China's State Reserve Bureau must seek about 300,000 tons of
copper to rebuild its reserves, Macquarie Bank Ltd. analysts Jim
Lennon and Adam Rowley said today in a report. Prices are up 22
percent in the past year and reached a 16-year high last month as
global demand growth rose faster than mine output.
``A lot of what's going on right now is basically demand
driven,'' said Stuart Flerlage, managing principal at Brownstone
Advisors LLC in New York. ``Demand will have a huge impact,
particularly on the inability of people to accurately judge
Chinese demand. Any surprises will probably be on the upside.''
Copper futures for July delivery rose 1.1 cents, or 0.8
percent, to $1.452 a pound at 11:09 a.m. on the Comex division of
the New York Mercantile Exchange. Prices are down from a high of
$1.536 on April 12.
Copper on China's Shanghai Futures Exchange climbed 1.2
percent, the first day of trading after a holiday last week. A
futures contract is an obligation to buy or sell a commodity at a
set price by a specific date.
The Macquarie analysts raised their estimate for prices this
year to $1.413 a pound from $1.38. So far, copper has averaged
$1.4527.
Chinese Growth
China's economy grew at the fastest pace in eight years, up
9.5 percent in 2004, spurring demand for raw materials such as
copper, steel and aluminum to construct buildings and roads and
to produce more power lines, cars and appliances.
Product exports from China probably rose 33 percent in April
from the same month last year, according to a Bloomberg News
survey of seven economists. The commerce ministry may report
April trade figures this week in Beijing.
``There's some Chinese demand,'' said Roy Carson, an analyst
at Triland Metals Ltd. in London.
Copper prices in New York fell 1.6 percent last week on
concern a slowing U.S. economy would erode demand and lead to a
surplus of metal.
Speculators have reduced their purchases of copper futures
and increased their sales. Hedge funds and other speculators
holding at least 100 contracts bought 19,380 more contracts than
they had sold as of May 3, down from 22,360 a week earlier, data
from the Commodity Futures Trading Commission on May 6 showed.
The reduction came as speculators increased sales to 15,269
contracts from 12,857 a week earlier. If prices continue to rise,
those investors may have to buy back the contracts to limit their
losses, London-based Barclays Capital said today in a report.
``The negative view among investors, in fact, makes us even
more upbeat on copper price prospects,'' Barclays said.
On the London Metal Exchange, copper for delivery in three
months rose $36, or 1.1 percent, to $3,210 a metric ton ($1.456 a
pound.)
--With reporting by Chanyaporn Chanjaroen in London. Editor:
Stroth. |
