Copper Gains in London as Consumers Buy After Price Decline
2005-12-13 07:17 (New York)
By Simon Casey
Dec. 13 (Bloomberg) -- Copper rose in London as consumers
took advantage of yesterday's decline in the price of the metal,
the biggest one-day drop in almost three weeks.
``Several customers are delaying buying copper because of
higher prices but we see a huge buying momentum at every dip
which helps prices remain firm,'' said R.K. Kasliwal, chief
financial officer at Hindalco Industries Ltd., India's biggest
non-ferrous metal producer, in an interview today.
Copper dropped 1.9 percent on the London Metal Exchange
yesterday, its steepest decline since Nov. 22. The metal, mostly
used in electrical wiring and plumbing, has risen 39 percent
this year partly on speculation about a supply shortage. Demand
will exceed production this year by 297,000 metric tons, Merrill
Lynch & Co. said in a Dec. 9 report.
Metal for delivery in three months on the LME rose $52, or
1.2 percent, to $4,423 a metric ton as of 12:04 p.m. The metal
traded yesterday at $4,475, matching the record set on Dec. 9.
The price may also rise based on chart indications,
analysts said. The relative strength index for copper fell
yesterday to 64.67 from 76.82 on Dec. 9. An index reading higher
than 70 may show prices will drop. Yesterday's reading was
``neutral'' and showed prices may increase, said Angus
MacMillan, an analyst Bache Financial in London, in a note.
``Copper has led the way for the metals markets, and these
trends are entrenched into 2006,'' said Jordan Kotick, head of
technical analysis at Barclays Capital Global in New York, in an
interview yesterday.
Smelter Restart
Hindalco, based in Mumbai, may restart copper production
next week at a smelter in India damaged in a Nov. 21 explosion,
company spokesman Pragnya Ram said today.
The disruption at the 250,000 ton-a-year plant is among
incidents that have reduced global output below earlier
expectations. Stephen Briggs, a London-based analyst for Societe
Generale, on Nov. 21 doubled his forecast production shortfall
for 2005 to 500,000 tons.
Analysts have also revised price forecasts higher. John
Meyer, an analyst at Numis Securities in London, said today he
raised his 2006 average copper price forecast to $1.30 a pound
from $1.20 previously. Demand will beat production in the first
half of 2006, Meyer said.
Aluminum fell $6 to $2,225 a ton on the LME. Zinc rose $33
to $1,825 and nickel dropped $200 to $14,050. Lead gained $8 to
$1,105 and tin fell $20 to $6,855.
--With reporting by Debarati Roy in Mumbai. Editor: Wallace,
(jwc). |
