Copper Gains in London on Speculation Demand to Outpace Supply
By Katy Watson
Sept. 5 (Bloomberg) -- Copper gained in London on speculation supply won't keep pace with growing demand as manufacturers increase consumption of the metal used in construction after the summer vacation period.
Copper reached a record $8,800 a metric ton on May 11, propelled by demand from countries including China. While global copper stockpiles climbed 23 percent to 189,462 tons since the end of July, inventories remain ``seasonally low,'' said John Meyer, an analyst at London-based Numis Securities.
``There is concern that this is insufficient to meet new demand as manufacturers ramp up production into the autumn,'' said Meyer.
Copper for delivery in three months on the London Metal Exchange rose $80, or 1.1 percent, to $7,730 a metric ton as of 10:13 a.m. in London. The metal has gained 76 percent this year.
Workers at Chile's Escondida, the world's biggest copper mine, returned to work Sept. 2 after a strike that lasted nearly four weeks and halved production. Further wage negotiations later this year at mines including Chile's state-owned Codelco may help to keep prices high, said Meyer.
``Demand is the key to the current market, with the potential supply disruption being the catalyst to continuing high prices,'' he said. ``The supply deficit looks likely to continue for the next six to 12 months.''
Also on the LME, aluminum gained $35 to $2,525 a ton, nickel added $450 to $28,050, lead was $17 higher at $1,275, tin rose $25 to $9,075 and zinc advanced $67 to $3,520.
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