Copper Rises to Record in London for Third Consecutive Day
2005-12-09 07:37 (New York)
By Simon Casey
Dec. 9 (Bloomberg) -- Copper rose to a record in London for
a third consecutive day on speculation output in Chile, the
biggest producer of the metal, may be disrupted by a rail strike.
Chile's Ferrocarril de Antofagasta a Bolivia, which carries
copper from mines to ports, is using replacement workers to run
trains, union secretary Luis Ortiz said yesterday. The strike has
lasted two days and no talks are scheduled with management.
Supply disruption would support prices that have already gained
this year from unforeseen production cuts, said Will Adams, an
analyst at U.K. metals information Web site Basemetals.com.
``The bull run continues to gather momentum,'' Adams said in
a report today. ``It does not seem as if there is anything to
stop it, especially when the market is exposed to supply
disruptions.''
Copper for delivery in three months on the London Metal
Exchange rose as high as $4,475 a metric ton, $3 higher than the
record set yesterday. The metal was $11, or 0.3 percent, higher
at $4,473 as of 12:25 p.m. local time. Copper has risen 2 percent
this week.
The strike-hit railway carries copper for mines including
BHP Billiton's Escondida, the world's biggest copper mine, where
the strike has had no impact on operations, the company's
spokesman in London, Mark Lidiard, said yesterday. Chile is the
world's biggest copper producer, accounting for about a third of
copper produced from mines worldwide.
Prices for the metal have surged 42 percent this year as
demand outstrips production. Standard Bank in London said in a
Nov. 29 report that the shortfall in 2005 will be 343,000 tons.
Supply Disruption
Copper production has been curbed in 2005 by unforeseen
events such as the Nov. 21 explosion which closed a smelter
operated by India's Hindalco Industries Ltd. A strike at Asarco
LLC, the second-largest U.S. copper producer, and a fuel shortage
in Zambia also disrupted smelter output this year.
Merrill Lynch & Co. raised its 2006 price forecasts for
copper, aluminum and zinc on rising Asian demand. Copper next
year will average $1.65 a pound, or $3,638 a ton, 32 percent
higher than Merrill's previous forecast, analysts led by Sydney-
based Vicky Binns said in a report today.
``This is still a great environment for commodities
consumption,'' the analysts said.
Aluminum rose $20, or 0.9 percent, to $2,255 a ton. Earlier
it traded as high as $2,260 a ton, a 16-year high. The
lightweight metal, used to make beverage cans and car components,
may average $1 a pound, or $2,205 a ton, next year, Merrill said.
Zinc increased $14 to $1,842, and earlier traded at a 16-
year high of $1,848. Nickel gained $50 to $14,050 and tin dropped
$95 to $6,700.
Lead increased $5 to $1,106. Earlier it traded as high as
$1,110, beating the record set yesterday by $3.
--With reporting by Tan Hwee Ann in Melbourne and Heather Walsh
in Santiago. Editor: Wallace |
