Copper Prices Extend Record High as Global Stockpiles Decline
2005-07-27 09:54 (New York)
By Jennifer Itzenson
July 27 (Bloomberg) -- Copper prices in New York rose,
eclipsing yesterday's record high, as global inventories declined,
signaling growing demand for the metal used in homes, cars and
appliances.
Stockpiles monitored by the London Metal Exchange fell 300
metric tons today to 26,550 tons. Inventories have dropped 46
percent this year, the exchange said. Copper prices in New York,
London and Shanghai rose to records this week as demand from
China, the world's biggest user, showed little sign of slowing.
``We're in a bullish mode,'' said Michael Giblin, a partner
at Bruckman Trading Corp. in New York. ``We're close to contract
highs, and there is demand.''
Copper futures for September rose 1 cent, or 0.6 percent, to
$1.616 a pound at 9:44 a.m. on the Comex division of the New York
Mercantile Exchange, after touching $1.622. Prices had climbed to
$1.6205 yesterday, which had been the highest ever. Stockpiles
monitored by Comex are down 75 percent this year.
U.S. durable goods orders unexpectedly increased in June, the
Commerce Department said in Washington. Bookings for expensive
items made to last at least three years rose 1.4 percent after a
6.4 percent gain in May that was larger than previously reported.
Economists forecast a 1 percent drop in June, according to the
median estimate in a Bloomberg News survey.
The drop in inventories comes as strikes at Asarco LLC in
Arizona and Texas are in their fourth weeks. Talks aren't
scheduled between the union and management until Aug. 2. Asarco, a
unit of Grupo Mexico SA in Mexico City, produced about 1.1 percent
of the world's copper in the first quarter.
Asarco earlier this month invoked a ``force majeure'' clause
in contracts with copper customers, declaring its inability to
make deliveries because of the strike.
``If customers of Asarco are not going to get their allocated
amount for August, they're going to have to scurry around and buy
it elsewhere,'' said Warren Gelman, president of Kataman Metals
Inc., a trading firm in St. Louis. ``Unless I see material start
to flow into the warehouses, either into LME or Comex, I will
remain on the bullish side.''
A futures contract is an obligation to buy or sell a
commodity at a set price by a specific date.
--Editor: Stroth, Enoch. |
