Copper Gains to Record in London on Chinese Demand, Inventory
2006-01-25 06:15 (New York)
By Julie Tay
Jan. 25 (Bloomberg) -- Copper rose to a record in London
on speculation demand growth may accelerate after China today
said its economy grew more than expected and as stockpiles of
the metal fell.
China, the world's largest consumer of copper used to make
cables and pipes, expanded 9.9 percent last year, overtaking
the U.K as the world's fourth-largest economy. Copper inventory
monitored by the London Metal Exchange declined 4.7 percent
over four consecutive days to 101,500 metric tons, according to
exchange data today.
``The Chinese data indicates a continuation of strong GDP
growth in China and Asia enabling further demand growth for
commodities and the potential maintenance of commodity prices
at historically high levels,'' John Meyer, a London-based
analyst at Numis Securities Ltd., said in an e-mailed report
today.
Copper for delivery in three months gained to a record
$4,700 a metric ton on the London Metal Exchange. It traded
$48, or 1 percent higher, at $4,696 at 10:47 a.m. local time.
Numis may increase its copper price estimate as it may
``prove to be overly conservative'', Meyer said, without
elaborating. Meyer's current forecast is for copper to decline
to an average of $3,086 a metric ton this year.
China's gross domestic product rose to 18.2 trillion yuan
($2.26 trillion) after expanding 10.1 percent in 2004, the
nation's statistics bureau said in Beijing. Economists forecast
growth 9.8 percent for the full year, according to a Bloomberg
News survey.
`Remain High'
``Strong growth demand for China is a notable positive
pointer on the demand side,'' Paris-based analyst Alain William
at ING Wholesale Banking said in a report. ``Prices should
remain high.''
Copper may gain to an average of $2 a pound ($4,409.20)
this year, up from $1.66 last year as stockpiles remain low, he
added.
Chinese processors such as cable makers are buying copper
to keep plants running during the Lunar New Year, because
Chinese markets are closed from Jan. 30 to Feb. 3.
--Editor: Griffiths. |
