Copper Heading for its Biggest Weekly Gain in Nine in London
2005-04-22 06:32 (New York)
By Chanyaporn Chanjaroen
April 22 (Bloomberg) -- Copper prices in London headed for
the biggest weekly gain in nine as wire and pipe manufacturers
bought the metal to replenish their dwindling stockpiles.
Global copper stockpiles monitored by exchanges in London,
New York and Shanghai are less than a quarter of their year-ago
level, according to Bloomberg calculations. The second quarter is
usually when industries such as wire and cable makers step up
production, said Robin Bhar, an analyst at Standard Bank London.
``The market is still very tight,'' Bhar said by telephone.
``Consumers, traders and funds are all buying copper.''
Copper for delivery in three months on the London Metal
Exchange rose $18 or 0.4 percent, to $3,268 a metric ton at 11:14
a.m. in London. The contract has risen 2.7 percent this week, the
biggest gain since the week ended Feb. 18. It is 3.8 percent
higher this year.
Copper fell 1.7 percent yesterday, the largest decline since
April 14. The loss came after China, the largest consumer of the
metal used in wires and pipes, cut copper imports for an 11th
straight month in March.
China, which will account for 22 percent of copper use this
year according to JPMorgan Chase & Co., is seeking to slow growth
to fend off inflation. Producer-price inflation rose to 5.6
percent in March, the first acceleration in five months,
according to government data released today.
Copper stockpiles monitored by the LME jumped 11 percent
today, the largest daily gain since Aug. 18. The increase in
Rotterdam, one of Europe's largest areas of consumption, brought
the stockpile to the highest since Nov. 24.
Mining Expansion
Mining companies such as Melbourne-based BHP Billiton, the
world's biggest, are expanding production of concentrate, a
powdery material containing as much as 50 percent copper.
The rise in stockpiles ``doesn't surprise me,'' Maqsood
Ahmed, an analyst at Calyon Financial in London, said by
telephone. ``There's lot of concentrate around and it's just a
matter of time before they show up.''
Global mine capacity will rise a fifth to 19 million tons by
2008, exceeding space at smelters by 1.85 million tons, the
Lisbon-based International Copper Study Group said on April 19.
In China, copper stockpiles monitored by the Shanghai
Futures Exchange grew a less-than-expected 2.8 percent this week,
signaling supply may not be rising fast enough to meet demand in
China, said Cai Luoyi, a metal analyst at China International
Futures (Shanghai) Co.
``Arrival of stocks hasn't significantly eased the shortage
of copper supply,'' Cai said today by phone.
Copper stockpiles in Shanghai have plunged 81 percent in the
past 12 months as China's economy grew at 9.5 percent in the
first quarter, faster than expected.
Among other metals for delivery in three months on the LME,
aluminum rose $11, or 0.6 percent, to $1,867 a ton. Zinc was up
$10, or 0.7 percent, to $1,310 and tin added $35, or 0.4 percent,
to $8,160. Lead was up $2, or 0.2 percent, at $945 a ton. Nickel
fell $35, or 0.2 percent, to $15,890.
--With reporting by Chia-Peck Wong in Singapore. Editor: Wallace,
A. Brown |
