Copper Rises to Record on Signs of More Demand in Japan, Europe
2005-08-12 10:03 (New York)
By Pham-Duy Nguyen
Aug. 12 (Bloomberg) -- Copper prices in New York surged to a
record amid indications that economies in Japan and Europe are
recovering, signaling inventories may not meet growing demand for
the metal used in homes, cars and appliances.
Copper futures for September delivery climbed 2.4 cents, or
1.5 percent, to $1.671 a pound at 10 a.m. on the Comex division
of the New York Mercantile Exchange. Prices earlier reached a
$1.689, the highest ever. The metal has gained 1.3 percent this
week, heading for the sixth straight weekly gain.
Japan, the world's second-largest economy, grew at an annual
1.1 percent pace, the Cabinet Office said today in Tokyo.
Manufacturers including Yamaha Motor Co. are expanding factories
to meet rising overseas orders. The European Commission said
yesterday the euro region may grow at the fastest pace in almost
two years by the end of 2005.
``You're getting good numbers out of so-called slow
economies like Japan and Europe,'' said Michael Purdy, a trader
at ABN Amro in New York. ``The bearish arguments are kind of
disappearing'' for copper, he said.
On the London Metal Exchange, copper for delivery in three
months rose $50, or 1.4 percent, to $3,580 a metric ton ($1.6236
a pound) after reaching a record $3,605. Prices on the Shanghai
Futures Exchange were little changed, falling 0.6 percent this
week.
A futures contract is an obligation to buy or sell a
commodity at a set price by a specific date.
Global Inventories
Stockpiles monitored by the LME, the world's biggest metals
market, gained 1,125 metric tons, or 2.3 percent, to 50,925 tons
today, adding 13,800 tons this week. Still, inventory is equal to
about one day of global demand.
Recent gains in inventory are ``irrelevant'' amid rising
demand from Europe and Japan, Purdy said.
Dwindling copper supplies and economic growth in China, the
biggest user of the metal, have boosted prices. Global copper
stockpiles monitored by the London, Shanghai and New York
exchanges have declined 24 percent this year.
Record prices have revived investor interest in copper,
traders said.
``New highs brought in more fund buying,'' said Warren
Gelman, president of Kataman Metals Inc., a trading firm in St.
Louis.
Mine strikes at Asarco LLC, which produces about 1 percent
of the world's copper, may also give prices a boost, said Edward
Meir, a metals analyst in Darien, Connecticut, for London-based
Man Financial Ltd. Labor talks today are unlikely to end a five-
week strike, he said.
``There's some nervousness about the Asarco situation,''
Meir said. ``It's not going to get resolved today.''
--Editor: McKiernan |
