Copper Heads for Biggest Daily Gain in Four Weeks on Stockpiles
2005-10-17 11:42 (New York)
By Simon Casey
Oct. 17 (Bloomberg) -- Copper headed for its biggest one-
day gain in four weeks in London as investors and traders judged
price declines last week were overdone, given a drop in supplies
of the metal used in power cables and plumbing.
Stockpiles tracked by the London Metal Exchange fell 1,625
metric tons, or 2.4 percent, to 65,700 tons, the exchange said
today in a daily report. The amount is equal to less than two
day's global copper consumption. Copper for delivery in three
months dropped 2.9 percent last week.
``There's a bit of bargain-hunting going on,'' said Will
Adams, an analyst at Saffron Walden, England-based metals
information Web site Basemetals.com, in a telephone interview
today. ``We are still getting stock drawdown. That's going to
keep the market ticking over.''
Copper for delivery in three months on the LME rose $107,
or 2.8 percent, to $3,908 a ton as of 4:27 p.m. London time. It
was the largest one-day advance since Sept. 19. The metal fell
2.9 percent last week.
Last week's decline was ``rather small by the standards of
the recent past,'' said Angus Macmillan, an analyst in London at
Bache Financial. ``We will need to see more metal in warehouse
before we call time on this market.''
Shrinking stockpiles are cutting the amount of copper
available to consumers, who face a shortfall this year. The
deficit will total 250,000 tons, Stephen Briggs, an analyst in
London at Societe Generale, wrote in an Oct. 3 report.
Labor Disputes
Labor disputes in the U.S. and Canada have limited copper
production. A strike at plants and mines operated by Asarco LLC,
the No. 2 U.S. producer, began July 2. Strikes last month also
cut output at plants operated by Canadian miners Falconbridge
Ltd. and Teck Cominco Ltd.
Fuel shortages in Zambia, Africa's largest copper-producing
nation, also reduced output. Glencore International AG and First
Quantum Minerals Ltd.'s Mufulira smelter was restarted last week
after a closure caused by the disruption.
Vedanta Resources Plc's Zambian unit, Konkola Copper Mines
Plc, is operating at between 60 percent and 70 percent of
capacity because of the shortage, Augustine Seyuba, Konkola's
vice president of corporate affairs, said today in a telephone
interview.
Hedge-fund managers and other large speculators increased
their net-long positions in New York copper futures by 17
percent, or 1,590 contracts, in the week ended Oct. 11,
according to U.S. Commodity Futures Trading Commission data.
Speculative long positions, or bets prices will rise,
outnumbered short positions by 11,111 contracts on the Comex.
Equivalent data for LME trading isn't available.
Aluminum Gains
Aluminum dropped amid speculation that exports from China,
the world's largest producer of the lightweight metal, will
extend declines. August exports dropped 57 percent from a year
earlier to 70,310 tons, according to data from the Beijing-based
customs office.
More Chinese aluminum will be used domestically as the
county's consumption continues to grow while production growth
is curbed, Pan Jiazhu, vice-president of the Chinese Nonferrous
Metals Industry Association, said last month at an industry
conference in Atlanta.
``Less exports coming out of China is the key in that
market,'' Adams said.
Aluminum for delivery in three months rose $42.50, or 2.2
percent, to $1,990.50 a ton, a seven-month high.
Nickel gained $320, or 2.6 percent, to $12,550, while zinc
increased $40 to $1,515, an eight-year high. Lead rose $11 to
$978 and tin increased $100 to $6,575.
--With reporting by Anthony Mukwita and Antony Sguazzin in
Johannesburg. Editor: Carrigan. |
