Copper Jumps to Record as China Stockpiles Drop, Demand Outpaces Supplies
By Yi Tian - Dec 27, 2010 C
opper futures rose to a record as inventories declined in China, the world’s largest user, bolstering speculation that demand will outpace supply.
Stockpiles monitored by the Shanghai Futures Exchange fell 5.8 percent last week, the biggest drop in almost three months. As of Sept. 30, global consumption exceeded output by 436,000 metric tons this year, the International Copper Study Group said last week. That compares with a deficit of 56,000 tons in the same period last year, the group said.
“Demand is pushing new highs while supply remains reasonably tight,” said Tim Parker, who manages $7.5 billion at T. Rowe Price Group Inc.’s New Era Fund in Baltimore. “There are only days of supply in inventories, and there’s so little new copper coming into the market.”
Copper futures for delivery in March rose 2.15 cents, or 0.5 percent, to close at $4.28 a pound at 1:13 p.m. on the Comex in New York. Earlier, the metal reached $4.2985, the highest ever. Prices have surged 49 percent since July 1, partly on demand from emerging markets including China.
The global market is in “a significant deficit owing to stronger than anticipated demand growth,” the Lisbon-based ICSG said.
Copper may touch $5 next year amid falling stockpiles, Macquarie Bank Ltd. said in a report.
The London Metal Exchange is closed today and tomorrow for public holidays.
To contact the reporter on this story: Yi Tian in New York at Ytian8@bloomberg.net.
To contact the editor responsible for this story: Patrick McKiernan at pmckiernan@bloomberg.net
