Copper Rises as China Stockpiles Drop for Second Straight Week
2005-12-16 14:45 (New York)
By Simon Casey
Dec. 16 (Bloomberg) -- Copper rose as much as 2.6 percent in
London after inventory in China dropped for a second consecutive
week, signaling demand is rising in the world's largest consumer of
the metal used in power cables and plumbing.
Stockpiles monitored by the Shanghai Futures Exchange dropped
3.3 percent to 71,584 metric tons, the exchange said in a weekly
report on its Web site today. China's investment in real estate and
other fixed assets rose 29 percent in November, the fastest pace
this year, the National Bureau of Statistics said yesterday.
Increased demand from construction and manufacturing will raise
Chinese copper use by 8 percent to 3.7 million tons, Standard Bank
said in Nov. 1 report.
``The fall in Shanghai stocks today has been the impetus for
today's increase,'' said Nick Moore, an analyst in London at ABN
Amro Holding NV, in an interview.
Copper for delivery in three months on the London Metal
Exchange gained as much as $114 to $4,465 a ton. It was $104 higher
at $4,455 as of 7 p.m. in London. The metal traded at a record
$4,475 on Dec. 9. On the Comex division of the New York Mercantile
Exchange, copper for March delivery rose 2.8 cents to $2.029 a
pound.
Inventory is needed by copper consumers to fill the production
shortfall forecast for this year. Demand will rise 1 percent this
year to 16.9 million tons, beating production from mines and
recycled scrap by 297,000 tons, Merrill Lynch & Co. said in a Dec.
9 report.
LME Stockpiles
Stockpiles tracked by the LME, the Comex division of the New
York Mercantile Exchange and the Shanghai Futures Exchange total
150,717 tons, according to data compiled by Bloomberg. That's equal
to about three days of global copper use.
The State Reserve Bureau, China's stockpiling agency,
auctioned 50,800 tons of spare metal in November and December. The
sales were part of a plan to damp prices and raise funds to help
settle losing bets by government trader Liu Qibing that may involve
as much as 130,000 tons of the metal.
The SRB's sales were less than some analysts expected. The
bureau has 1.3 million tons of copper inventory, Reuters cited an
official from the bureau as stating on Nov. 11.
``Talk that the SRB was going to deliver hundreds of thousands
of tons hasn't become reality,'' Moore said.
Nickel gained $375, or 2.8 percent, to $14,000 a ton. LME-
monitored stockpiles of the metal, which is mostly used to make
stainless steel, rose 2,034 tons, or 7.2 percent, to 30,144 tons,
the highest since Dec. 15, 2003
Aluminum advanced $19.5, or 0.8 percent, to $2,240 a ton. Zinc
climbed $49 to $1,835, lead rose $15 to $1,090 and tin dropped $30
to $6,800.
--With reporting by Stuart Wallace in London. Editor: Wallace,
(jwc/pjm). |
