Copper Rises in London on Speculation Demand Will Grow in China
2006-09-26 09:00 (New York)
By Chanyaporn Chanjaroen
Sept. 26 (Bloomberg) -- Copper rose in London, snapping a
two-sessions slide, on speculation that makers of metal wires
and pipes, particularly in China, will increase purchases to
avoid a supply shortfall this year.
Demand for copper will exceed mine output by 52,000 metric
tons through 2006, after a deficit of 360,000 tons last year,
Goldman Sachs Group Inc. forecast on Sept. 18. Stockpiles have
plunged 86 percent in the past four years, leaving stockpiles
monitored by the London Metal Exchange at levels sufficient to
meet demand for just three days.
``There is no doubt that consumers are adding support to
this market,'' said Peter Hickson, a London-based strategist at
UBS Ltd. who has worked more than three decades in the metals
and mining industry, including the last 12 as a metals analyst.
Copper for delivery in three months gained $45, or 0.6
percent, to $7,550 a metric ton ($3.425 a pound) at 1:56 p.m. on
the London Metal Exchange. Prices have doubled in the past year
and reached a record $8,800 on May 11.
China, the world's largest copper-buying nation, probably
used about 1 million tons of the metal from their own stockpiles
in the past 12 months, which will force the country to boost
imports as domestic supply declines, Hickson said.
``The Chinese have got themselves short of copper,'' he
said. Copper's 14 percent decline from its record high came from
selling by hedge funds, not actual users of the metal, he said.
Inventories
Stockpiles of copper tracked by the LME increased 325 tons
to 121,950 tons, the LME said in a daily report today. In China,
inventory monitored by the Shanghai Futures Exchange fell to a
19-week low last week, according to the bourse's weekly report.
The metal declined yesterday and Sept. 22 on a speculation
that a slowdown in the U.S. housing market may hurt demand for
wire and pipe. The U.S. is the world's second-largest consumer
of copper after China.
Copper for delivery in December fell 0.35 cent, or 0.1
percent, to $3.444 a pound at 8:56 a.m. on the Comex division of
the New York Mercantile Exchange. A futures contract is an
obligation to buy or sell a commodity at a fixed price for a
specific delivery date.
Nickel stockpiles dropped 312 tons to 5,724 tons, the LME
said, equivalent to less than two days of global consumption.
Nickel inventory has declined 84 percent this year.
Nickel Prices
Prices of nickel, used as an alloy in stainless steel,
gained $300, or 1 percent, to $28,300 a ton. The three-month
contract has doubled in the past year as production of stainless
steel expanded.
Global stainless output jumped 6.5 percent to 13.9 million
tons, the highest ever, in the first half, the Brussels-based
International Stainless Steel Forum said today on its Web site.
Production from China, the world's largest producer, soared 44
percent to 2.3 million tons, the forum said.
Among other LME-traded metals, aluminum fell $4 at $2,514 a
ton and lead advanced $25 to $1,365 a ton. Tin added $75 to
$9,050 a ton. Zinc dropped $19 to $3,380 a ton.
--With reporting by Francine Lacqua in London. Editor: Carrigan
(sds) |
