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Gold/Mining/Energy : Copper - analysis -- Ignore unavailable to you. Want to Upgrade?

To: Robert Douglas who wrote (387)	9/10/2002 5:57:57 PM
From: Stephen O	Respond to of 2131

Metals Gain as Investor Expectations Buoyed by Rising Equities 2002-09-10 13:11 (New York) London, Sept. 10 (Bloomberg) -- Copper rose to a seven-week high while aluminum and other metals also gained in London as surging stock markets in Europe, the U.S. and Asia helped boost investor confidence in an economic recovery. Stock markets rose across Europe with the Bloomberg European 500 Index gaining as much as 2.5 percent, to its highest level in more than a week. U.S. stock indexes rose for a third day. Stock markets in Japan and Hong Kong also gained yesterday. ``Equity prices have stabilized,'' said Kamal Naqvi, an analyst at Macquarie Bank in London. ``Sentiment towards metals has been largely dictated by the equity markets for some weeks now and that's likely to continue.'' Copper for delivery in three months rose $33, or 2.2 percent, to $1,544 a ton on the London Metal Exchange, the highest price since July 23. The metal has gained 4.1 percent this year. In other metals, aluminum for delivery in three months rose $6, or 0.5 percent, to $1,350 a ton, its highest price since July 19. Zinc gained $17, or 2.2 percent, to $793 a ton, its highest price since July 22. Tin rose $40, or 1 percent, to $3,980 a ton, its highest price since July 30. Nickel rose to a seven-week high after stockpiles of the metal monitored by the LME posted their biggest decline in a month and reached their lowest level since May. Nickel for delivery in three months rose $270, or 4 percent, to $6,950 a ton. --Stuart Wallace in the London newsroom (44-20 7673-2388), or swallace6@bloomberg.net. Editor:Foroohar

To: Robert Douglas who wrote (387)	11/4/2002 11:39:34 AM
From: Stephen O	Read Replies (1) \| Respond to of 2131

Copper Rises as an Interest-Rate Cut Would Help Boost Demand New York, Nov. 4 (Bloomberg) -- Copper rose to a 3 1/2-month high on speculation that the Federal Reserve will cut interest rates this week, strengthening the U.S. economy and increasing industrial demand for metals. Twenty of 22 primary dealers, companies that trade directly with the Fed, predicted a rate reduction when central-bank policy makers meet two days from now. Prospects for an economic recovery at a time when mining companies are cutting back contributed to a 9.8 percent rise in copper prices in the past four weeks. An interest-rate cut ``should boost copper market values,'' said Michael Guido, head of the commodity hedge-fund sales desk at Societe Generale SA in New York. ``It's all about perception that demand is going to get better six months from now.'' Copper for December delivery was up 0.4 cent at 73 cents a pound at 10:43 a.m. on the Comex division of the New York Mercantile Exchange. The contract earlier in the session touched 73.3 cents, the highest price for a most-active contract since July 18. Prices were 19 percent higher than at this time last year, when copper futures were plunging toward a 14-year low of 60.35 cents a pound on Nov. 8. Prices have been boosted partly by announcements of production cutbacks. Chile's Codelco, the world's largest copper producer, said in August that its output fell 4.9 percent in the first half of the year from the same period in 2001 as part of planned cutbacks aimed at boosting prices. Phoenix-based Phelps Dodge Corp., the second-largest producer, said last week that its third-quarter output was down 7.1 percent from a year earlier. In London, copper for delivery in three months was up $17, or 1.1 percent, at $1,600 a metric ton (72.57 cents a pound) on the London Metal Exchange after touching a 3 1/2-month high of $1,602. --Claudia Carpenter in the New York newsroom (212) 318-2346 or at ccarpenter2@bloomberg.net, with reporting by Iain Rogers in London Editors: Bixby, *Banker.

To: Robert Douglas who wrote (387)	11/20/2002 6:43:40 PM
From: Stephen O	Read Replies (1) \| Respond to of 2131

DJN BARRON'S: Commodities Corner -- Consulting Dr. Copper Subject: BRN DJN DJWI CAC CMD CPE DJPF DJSS DJWB ERN FRX Market Sector: NND TPX Display Page: 1114 61024 Speculators Buy Metal As A Bet On Recovery Amid the gloom of anemic corporate earnings and bearish sentiment about the global economy, one commodity is performing surprisingly well -- copper. The metal has climbed over 9% since early October despite U.S. indicators that suggest economic growth is hesitant and patchy at best. And with the fundamental supply and demand factors for the metal little changed over the same period, some observers feel the rally in copper prices is a sign that the global economy is on the road to recovery. They view the metal as a strong indicator of economic health and prove the point by noting the historical correlation between copper prices and moves both upward and downward in the equity markets. Indeed, the October rally for the metal paralleled a jump in the Dow Jones Industrial Average of around 15%. Copper speculators have "definitely become more bullish," says Robin Bhar, an analyst at Standard Bank in London. "They seem to feel that maybe we've seen the worst of the slowdown and are probably factoring in a cut in interest rates." Some analysts are not convinced copper is a leading indicator of economic health, but most agree the metal continues to offer a realistic reflection of sentiment in the investment community. The reason: an increasing involvement of investment funds in metal-futures trading. The funds use copper and other base metals as mediums for speculation. The funds' trading strategy is driven largely by their expectations for the economy. They work on the theory that a stronger economy will trigger more demand for metals, which are used mainly in industrial processes. Because the funds now account for such a large percentage of trade on the metal- futures markets, any change in economic sentiment is mirrored in the metal price. Analysts attribute the steady slide in copper prices since September 2000 to selling by funds, well ahead of the emergence of the most obvious signs that global economic growth was contracting. So now, with funds building long positions and copper prices rising despite mediocre U.S. economic data, analysts are asking if the funds are once again ahead of the game. Indeed, their involvement in the October price rally is exposed through recent Commitments of Traders reports from the Commodity Futures Trading Commission. Large speculative funds held a net long exposure of 15,000 Comex contracts on Nov. 8, compared with a net short position of around 20,000 contracts at the beginning of October. Whether or not the move to a positive stance for copper is justified, traders are unable to fight the overwhelming market power held by the funds, even if they believe the fundamentals don't warrant such a strong price jump. "It is probably too soon [for copper to rally] but you can't go against the trend at the moment," says Maqsood Ahmed, analyst at Credit Lyonnais Rouse in London. "You would need very deep pockets to fight the funds, so for now it seems best to go with the flow." Because of this, banks, smaller speculators and trade houses will back the rally and offer further momentum to any upward move. But Bhar says the gains during October could have been more exaggerated had the threat of war against Iraq not been present. "People are still concerned with war," he says, adding that the $1,600 a ton price (at the London Metal Exchange) could be broken if peace was assured. The $1,600 price equates to 72.50 cents a pound at the Comex division of the New York Mercantile Exchange. Although Iraq has said it will accept the United Nations' resolution and has said it will allow unconditional access to the country by weapons inspectors, the threat of war still hangs over the copper market and the economy. Resistance at $1,600 a ton has held strong over the last few weeks but given that this is an important technical resistance level, any upward move in the price break would likely trigger another bout of fund buying and a sharp price climb. But as the fund dominance of the copper market continues, only the accompaniment of a brighter economic outlook will ensure lasting gains. "If the funds take a shine to this market we have the potential to hit $2,000 a ton in a very short space of time," says one LME dealer. "They are in the driving seat and everyone's waiting to see what they do." --- Daivd Elliott is a reporter with the OsterDowJones Commodity News in London. ---