Copper Rises for 1st Day in Three as China Inventories Decline
2005-08-26 12:15 (New York)
By Jennifer Itzenson
Aug. 26 (Bloomberg) -- Copper prices in New York rose for the
first day in three as inventories in China fell from the highest
in more than a year, suggesting improved demand for the metal used
in manufacturing and construction.
Stockpiles in Shanghai Futures Exchange warehouses fell 14
percent this week, the first decline in a month, the exchange said
today on its Web site. China is the world's fastest-growing major
economy and the biggest consumer of copper.
``The market has been trading off of the stocks situation,''
said Tom Boustead, an analyst at Refco LLC in New York. The size
of the decline in China ``surprised the market,'' he said.
Copper futures for December delivery rose 2.7 cents, or 1.7
percent, to $1.633 a pound at 12:04 p.m. on the Comex division of
the New York Mercantile Exchange. Prices have gained 1.4 percent
for the week, heading for the seventh such gain in eight weeks.
Demand in China climbed 8.8 percent from January to May as
worldwide usage fell 2.9 percent from a year earlier, the Lisbon-
based International Copper Study Group said on Aug. 19.
Copper prices have dropped 6.2 percent since reaching a
record $1.738 on Aug. 16 as global stockpiles tracked by the
London Metal Exchange more than doubled this month. LME
inventories rose 325 metric tons, or 0.5 percent, to 64,925 tons
today. For the week, inventories rose 6.2 percent, compared with
20 percent last week.
``On the LME, we had a build, but it was small,'' Boustead
said. ``That was a little disappointing.''
Approaching Holidays
Buyers may be increasing purchases ahead of holidays in
London and New York, some traders said. London copper trading will
be closed on Aug. 29 for a bank holiday, and New York trading will
be closed on Sept. 5 for Labor Day.
``The market has been book squaring,'' or completing copper
purchases ahead of the long weekends, George Gero, senior vice
president at Legg Mason Wood Walker in New York.
A strike at Asarco LLC's operations in Arizona and Texas has
added to concerns about supplies. Union members striking since
July 2 at the copper producer's Mission, Silver Bell and Ray mines
and Hayden smelter in Arizona and a refinery in Amarillo, Texas,
are considering a company offer, union official Terry Bonds said
yesterday.
About 420 salaried employees have helped fill in for the
1,500 strikers, Asarco Chief Executive Daniel Tellechea said Aug.
10. Asarco, a unit of Grupo Mexico SA, accounts for about 1
percent of the world's copper.
A futures contract is an obligation to buy or sell a
commodity at a set price by a specific date.
--With reporting by Helen Yuan in Shanghai. Editors: Stroth,
Enoch. |
