NCU drops -> copper keeps going up
Copper Rises to Record Close in N.Y. on Bets Demand Will Outpace Supplies
Copper futures closed at a record inNew York on speculation that demand will outpace production as aglobal recovery sparks construction of new homes and appliances.
Output shortages of 800,000 metric tons may occur in 2011and in 2012, compared with a balanced market this year, saidTrafigura Beheer BV, which considers itself the second-largesttrader of industrial metals. Copper inventories may drop to anall-time low of less than one week’s usage, Bank of AmericaMerrill Lynch said. Prices have jumped 23 percent this year.
“The basic fundamentals are bullish,” said Lannie Cohen,the president of Capitol Commodity Services Inc. inIndianapolis. “China is still strong. Our recovery is lookingbetter. It seems there is not enough copper to meet demand.”
Copper futures for delivery in March rose 5.1 cents, or 1.3percent, to settle at $4.1005 a pound at 1:18 p.m. on the Comexin New York, the highest ever.
Yesterday, the metal reached $4.1315, the highest since May5, 2008, when futures touched an intraday record of $4.2605.
Prices still “have a chance to get to the old high” bythe end of the year, Cohen said. Copper may rise above $5 in2011, he said.
This year’s rally has been fueled partly by a 30 percentdrop in stockpiles monitored by the London Metal Exchange, whichare headed for their first annual decline since 2004.
ETF Metal Demand
Consumers are “concerned” about exchange-traded fundsbacked by physical copper, Simon Collins, head of refined metalsat Trafigura in Lucerne, Switzerland, said in an interview onDec. 6. Such funds “will result in higher prices,” he said.
In October, JPMorgan Chase & Co. and BlackRock Inc. saidthey were preparing to introduce copper ETFs, providinginvestors access to the metal in the form of an equity-likeproduct. Glencore International AG is the largest trader ofindustrial metals, according to Trafigura estimates.
On the LME, copper for delivery in three months added $135,or 1.5 percent, to $9,015 a metric ton ($4.09 a pound). Theprice rose to an all-time high of $9,044 yesterday.
Aluminum, lead, zinc and tin also gained in London. Nickelfell.
To contact the reporter on this story:Yi Tian in New York atYtian8@bloomberg.net.
To contact the editor responsible for this story:Steve Stroth atsstroth@bloomberg.net.