Copper Rises for First Time in Five Sessions on Supply Concerns
2006-03-09 07:58 (New York)
By Julie Tay
March 9 (Bloomberg) -- Copper prices in London rose for the
first time in five sessions on expectations that demand, led by
China, will outpace production.
Demand for copper, used in wiring and plumbing, will remain
``strong'' in 2006, Werner Marnette, chief executive officer of
Norddeutsche Affinerie AG, Europe's largest producer, said in a
Feb. 27 interview. Global demand will climb 5.9 percent this year,
exceeding supply for a fourth straight year, metals consultant
Bloomsbury Minerals Economics Ltd. said Feb. 20.
Copper prices ``are showing significant recovery,'' John
Meyer, a mining analyst with Numis Securities Ltd. in London, said
in a report. ``The supply-demand deficit could continue into next
year, and this could maintain copper prices at well above historic
price averages.''
Copper for delivery in three months rose $100, or 2.1 percent,
to $4,820 a metric ton at 12:55 p.m. on the London Metal Exchange.
Prices had dropped 4.8 percent in the past four sessions as
inventories climbed.
``Copper consumption in China typically enters the peak season
from March,'' when electrical appliances makers increase
production, said Wang Zheng, a metal trader with Shanghai Dalu
Futures.
Before today, the metal still had gained 7.4 percent this
year, reaching a record $5,059.50 a ton on Feb. 6.
``I've only seen very few cycles which have been so strongly
defined by physical demand,'' Norddeutsche's Marnette said. ``We
are still in a situation where we have an imbalance in demand and
production.''
Codelco Forecast
Juan Villarzu, CEO of Santiago-based Codelco, the world's
largest copper producer, said in February that prices will peak
this year before dropping to ``more normal'' levels as economic
growth slows and high prices discourage demand.
Global inventories monitored by the LME today increased 3,875
tons, or 3.1 percent, to 129,600 tons, the highest since June 2004.
Stockpiles gained 16 percent in the previous seven sessions.
On the LME, aluminum gained $38, or 1.6 percent, to $2,380 a
ton. Nickel rose $100, or 0.7 percent, to $14,800. Tin climbed
$175, or 2.3 percent, to $7,850. Zinc gained $20, or 0.9 percent,
to $2,245.
``The fundamentals remain very solid in supply and demand for
most metals,'' said Mark Pervan, head of research at Daiwa
Securities SMBC in Melbourne. ``I'm still very bullish on the
outlook for this year.''
Pervan forecasts copper will average $4,409 a ton this year.
--Editor: McKiernan
Story illustration: To chart LME three-month copper prices,
click {LMCADS03 <Cmdty> GP <GO>}. For more metal market news,
see {NI METMARKET BN <GO>}. For metals prices and mining
statistics, see {MINE <GO>}. Click on {CTOP <GO>} for more
commodity news.
To contact the reporter on this story:
Julie Tay in London at (44) (20) 7673 2866 or
jtay1@bloomberg.net |
