Copper Gains Most in 4 Months in London on Inventories, Demand
2007-09-11 11:48 (New York)
By Claudia Carpenter
Sept. 11 (Bloomberg) -- Copper gained the most in four
months in London after a drop in inventories suggested demand is
picking up. Nickel and other industrial metals also gained.
Copper inventories monitored by the London Metal Exchange
declined 0.2 percent to 137,275 metric tons. So-called canceled
warrants, or stockpiled metal that's due to be taken out of
storage, represented 6 percent of total inventories, more than
double the proportion at the end of last week, LME figures show.
``You would expect inventories to fall in the next couple of
days,'' said Michael Widmer, head of metals research at Calyon in
London. ``Demand is probably picking up at the moment.''
Copper for delivery in three months on the LME gained $329,
or 4.6 percent, to $7,489 a metric ton as of 4:30 p.m. local
time. A close at that price would be the biggest one-day increase
since April 10. The metal, used in wiring and water pipes, has
climbed 18 percent this year.
Demand from China, the world's biggest user of copper, has
helped copper prices advance for the past five years. China's
imports of copper and copper products rose to 1.91 million tons
in the first eight months of this year, 43 percent higher than a
year earlier, the Beijing-based custom's office said today.
Imports were down 7.2 percent from July.
``The decline was not as large as expected given that August
tends to be a very slow month,'' Edward Meir, an analyst at MF
Global Ltd. in Darien, Connecticut, wrote in a report e-mailed
today. ``The markets are therefore looking for much stronger
import numbers for September.''
`Ominous Evidence'
Canceled warrants for LME copper stockpiles rose 13 percent
to 8,200 tons after more than doubling yesterday. The warrants
represented 2.5 percent of total LME copper inventories at the
end of last week.
Still, overall inventories have risen 20 percent in the last
month. ``The recent trend in LME warehouse inventories provides
ominous evidence that markets are indeed transitioning to
surplus,'' Nick Moore, a London-based analyst at ABN Amro Holding
NV, wrote in a report published today.
Copper fell 6.9 percent on the LME last month, the biggest
drop since January, on speculation losses from subprime mortgage
defaults would slow U.S. economic growth and create surplus
production. In the first five months of this year, consumption
exceeded output by 300,000 tons, according to the Lisbon-based
International Copper Study Group.
Copper will probably average $7,500 in the fourth quarter,
Widmer said. Since June 1, it has averaged about $7,538.
Tin Rises
Tin gained $425 to $15,150 a ton as inventories fell to the
lowest in almost seven weeks. Exchange-monitored stockpiles
declined 3.2 percent to 13,525 tons, the lowest since July 26.
Lead gained $165 to $3,030 a ton, heading for its first one-
day increase since Aug. 30. Inventories of 23,900 tons are the
lowest since March 1990 and may decline further as demand from
manufacturers of car batteries typically climbs in the fourth
quarter, Widmer said.
Zinc advanced $76 to $2,780 a ton, rebounding from a 17-
month low of $2,680 traded yesterday. The so-called relative
strength index tracking the price in the past 14 days registered
a reading of 25.17 yesterday. A reading of 30 or less typically
indicates declines were overdone and prices are set to increase.
Higher zinc prices may be needed to halt a decline in
exports from China and meet demand from developed countries,
William Adams, an analyst at London-based metals information Web
site Basemetals.com, wrote in a report today.
Aluminum added $42 to $2,466 and nickel gained $835 to
$27,560.
--With reporting by Chanyaporn Chanjaroen in London and Li
Xiaowei in Shanghai. Editor: Casey (slw/jpl). |
