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

To: Stephen O who wrote (1172)	4/15/2005 10:01:00 AM
From: Stephen O	Read Replies (1) \| Respond to of 2131

Copper Rises for First Day in Four on Production Shortfall 2005-04-15 06:19 (New York) By Chanyaporn Chanjaroen April 15 (Bloomberg) -- Copper rose for the first day in four in London as China's demand for the metal used in electrical wires and plumbing exceeded supply. Copper futures fell 2 percent on the London Metal Exchange yesterday, two days after reaching a record $3,338 a metric ton. Global demand will rise to 17 million tons, exceeding production by 275,000 tons this year, Standard Bank analyst Robin Bhar forecasts. ``Fundamentals, especially the tightness, remain unchanged and we can't rule out new highs,'' said Neil Buxton, managing director of GFMS Metals Consulting in London. Hedge funds, which Barclays Capital estimates account for half of LME trading, may buy back contracts, he said. Copper for delivery in three months rose $19, or 0.6 percent, to $3,154 a ton at 9:49 a.m. in London. This week's 4 percent decline is the biggest since the first week in January. Prices have climbed 23 percent in the past year. ``Demand is obviously higher than the capacity and that's caused a shortage,'' Timothy Snider, president of Phelps Dodge Corp., the world's No. 2 copper producer, said yesterday. ``On the demand side, of course, China has surprised everybody.'' Stockpiles on the Shanghai Futures Exchange fell 5.2 percent this week to 21,004 tons, enough to meet two days' demand in China, the world's biggest user. China consumed 3.3 million tons in 2004, according to figures provided by Antaike. Low Inventories Phelps Dodge, Chile's state-owned Codelco, the world's biggest copper producer, and Melbourne-based BHP Billiton, the world's largest mining company, are increasing investment to meet China's growing demand. Copper prices may fall as smelters clear bottlenecks, Snider said. He didn't make a forecast. ``The market could be more in balance,'' Snider said. ``But we don't think that metal that is going to be coming through will do anything to relieve the low inventories out there.'' The state-run Chilean Copper Commission, known as Cochilco, yesterday increased its forecast for this year's average copper prices to between $1.33 and $1.37 a pound, or $3,014 a ton, because of dwindling stockpiles. Last year's average was $1.30. Cochilco in October estimated prices at $1.12 to $1.16. Codelco President Juan Villarzu on April 13 predicted average price of $1.30 a pound this year. Zinc, which fell 3.8 percent yesterday, rose $11, or 0.8 percent, to $1,267 a ton. Aluminum was $1 higher at $1,862 a ton and tin rose $50, or 0.6 percent, to $8,050. Nickel fell $70 to $15,350 and lead dropped $1 to $916. --With reporting by Chia-Peck Wong. Editor: Farr