Copper Climbs, Extending This Month's Rally on China's Demand
July 20 (Bloomberg) -- Copper prices rose for a fourth session, extending this month's rally, after economic growth in China, the world's biggest metals user, unexpectedly picked up in the second quarter.
Gross domestic product rose 9.5 percent from a year earlier after gaining 9.4 percent on the first quarter, the National Bureau of Statistics said in Beijing today, exceeding the median economist forecast of 9.2 percent in a Bloomberg survey. Copper touched a 16-year high last month as growth in China and the U.S. boosted metals demand.
``Consumption is very high in China, and the expectation going forward is it's only going to increase as we go into the second half of the year,'' said Michael Guido, director of hedge fund marketing and commodity strategy in New York for Societe Generale SA. ``All the ingredients are there for a sustained rise.''
Copper futures for September delivery rose 0.5 cent, or 0.3 percent, to $1.5915 a pound on the Comex division of the New York Mercantile Exchange after touching $1.597, the highest since June 17 when copper touched a high of $1.61. A futures contract is an obligation to buy or sell a commodity at a set price by a specific date.
Prices have rallied 5.4 percent this month, after a strike by workers at Asarco Inc.'s mines and refineries in Arizona and Texas. Inventories of copper monitored by the London Metal Exchange, up 1.8 percent today, have declined 70 percent in the past year.
High prices may limit purchases by manufacturers at a time when demand is seasonally slow, said Ingrid Sternby, an analyst at Barclays Capital in London. Trading on the Shanghai Futures Exchange yesterday fell to a five-year low, she said. ``Because of the seasonal slowdown, market participants are reassessing their positions at the moment.''
On the London Metal Exchange, copper for delivery in three months rose $9, or 0.3 percent, to $3,404 a metric ton ($1.544 a pound). The London contract needs to settle above $3,420 a ton this week to signal ``the beginning of a new higher range in prices,'' Guido said.
Prices in Shanghai rose 0.2 percent.
To contact the reporter on this story:
Claudia Carpenter in New York at ccarpenter2@bloomberg.net. |
