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Copper Rises in London to 6-Month High on Hedge Funds Buying

Sept. 30 (Bloomberg) -- Copper rose in London, rising above $3,000 a metric ton for the first time since March, after a report said U.S. economy grew faster in the second quarter than previously reported.


The U.S., the world's No. 2 user of copper in applications including electrical wiring and plumbing, has boosted consumption this year. Copper demand will exceed production in 2004, analyst forecast earlier this month.


`Gross domestic product, the total of goods and services generated by the world's largest economy, expanded at a 3.3 percent annual rate in the April-June period, the Commerce Department said yesterday. That compares with 2.8 percent estimated last month and 4.5 percent in the first quarter.


``U.S data showed healthy economic growth, which prompted renewed fund buying,'' said Robin Bhar, an analyst at Standard Bank in London, in an e-mailed report.


Copper for delivery in three months on the London Metal Exchange rose $10, or 0.3 percent, to $2,997 a ton at 8:44 a.m. local time. Earlier it traded as high as $3,002. Copper futures closed at an 8 1/2-year high of $3,030 on March 1.


Hedge funds, loosely regulated investment pools that bet on falling or rising securities prices, have boosted commodity holdings as prices have surged. London-based hedge fund Global Advisors LP said metals continue to attract investors.


Speculative long positions, or bets that prices will rise, outnumbered short positions on the Comex division of the New York Mercantile Exchange by 19,517 contracts in the week ended Sept. 21, according to U.S. Commodity Futures Trading Commission data. The net-long position rose 29 percent from a week earlier.


Production Lagging


The U.S. will boost its copper consumption 11 percent this year to 2.5 million tons, according to London-based consultant Bloomsbury Minerals Economics Ltd.


Copper production from mines and scrap this year will fall 701,000 tons short of demand of more than 16 million tons, the International Copper Study Group in Lisbon said last week.


China, the world's biggest consumer, increased demand by 17 percent in the first half, according to the study group. The country's smelters imported 36 percent more copper concentrate last month than a year earlier, according to customs data, a sign they expect demand to pick up.


The Washington-based International Fund said yesterday in its semi-annual World Economic Outlook report that global growth will likely reach 5 percent this year, the highest rate in nearly three decades.


A union at Codelco, the world's biggest copper producer, said it voted to strike at the Chilean company's northern division. About 760 supervisors at the government-owned company's rejected Codelco's offer for a 3.15 percent wage increase, according to an e-mailed statement from a union representing the workers.


Most other LME metals also rose. Aluminum gained $6 to $1,812 a ton, nickel increased $170 to $!5,070, and zinc was up $23.5 to a four-month high of $1,095.5. Lead rose $9 to $925 while tin was unchanged at $8,975.


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Copper, silver reach new heights


Copper and silver prices also climbed to multiweek highs, "helped by limited gold and copper mining and a world economy that the IMF described as the strongest in 30 years," said Todd Hultman, president of Dailyfutures.com, a commodity information provider.




Copper, silver reach new heights



"Realization that China is not cooling off anywhere near the levels first touted earlier this year has given base metals like copper reasons to move up sharply," said newsletter editor Grandich. "While pullbacks are natural occurrences, the least resistance for most metals is higher."


December silver rose 24.3 cents, or 3.6 percent, to close at $6.938 an ounce. It's at its highest level since late August and it's up more than 5 percent for the quarter. Copper for December closed at $1.396 a pound, up 0.3 cent for the session and up nearly 19 percent for the quarter. Copper futures haven't closed at a level this high in at least seven months.


Elsewhere, December palladium ended at $224.75 an ounce, up $4.85, and the October platinum contract rose $14.50 to close at $861 an ounce.


Platinum found support Thursday with miners at Impala Platinum Holdings on strike for a second day, and workers at Anglo Platinum renewing their threat to strike, according to the Associated Press. The two South Africa-based companies are the world's largest platinum producers.


Tracking inventories, copper supplies were down 565 short tons at 49,704 short tons as of late Wednesday, according to Nymex. Silver stocks were unchanged at 109.2 million, while gold inventories stood at 5.12 million troy ounces, up 115,598 from the previous session.



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Copper has surged overnight to close at 1.4426


Copper ÃÆâ€â„¢ÃƒÆ’ƒâ€Â ÃƒÆ’¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒ¢Ã¢â‚¬Å¾Ã‚¢ÃƒÆ’ƒÆ’¢Ã¢Ã¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã‚¡ÃƒÆ’‚¬Ãƒâ€Â¦ÃƒÆ’‚¡ÃƒÆ’Æâ€â„¢ÃƒÆ’ƒÂ¢Ãƒ¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚¬ Oct 06, 13:00

Bid/Ask 1.4426 - 1.4449

Change +0.0257 +1.81%

Low/High 1.4146 - 1.449


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From Blomberg approx. 10 hrs ago ... before last nights trading ...


Copper Near 9-Year High in New York as Exchange Stockpiles Fall

Oct. 6 (Bloomberg) -- Copper futures in New York traded near a nine-year high after global stockpiles monitored by the London Metal Exchange fell for the 10th day in 11.


Stockpiles monitored by the exchange have dropped 83 percent in the past year because of lower supply from the world's two biggest copper mines, in Indonesia and Chile, and rising demand in China and the U.S. Chinese copper demand may rise 16 percent next year according to Sumitomo Metal Mining Co., Japan's third- largest copper producer.


``The outlook still appears bullish for metals, with low inventories and tight supply continuing to dominate proceedings,'' Martin Mayne, an associate director of client sales at N.M. Rothschild & Sons Ltd., said in an e-mailed report from Sydney.


Copper for December delivery on the Comex division of the New York Mercantile Exchange fell 0.15 cent to $1.40 a pound in after-hours trading at 3:18 p.m. Sydney time.


The contract rose 0.3 percent yesterday to $1.4015. On Oct. 1, copper rose to $1.404 a pound, the highest closing price for a most active contract since August 1995.


Inventories monitored by the London exchange fell 2,525 tons, or 2.5 percent, to 97,625 tons, the exchange said yesterday. Escondida in Chile, the world's biggest copper mine, and Grasberg in Indonesia, the second-biggest, are both expected to produce less of the metal this year.


Copper for delivery in three months on the London Metal Exchange was bid at $2,994 a metric ton and offered at $2,998 at 3:42 p.m. Sydney time, compared with yesterday's closing price of $2,979 a ton.


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Copper Rises to 6-Month High in London on Stocks, Spain Strike

Oct. 6 (Bloomberg) -- Copper futures rose to a six-month high in London as stockpiles shrank and a strike at Atlantic Copper SA's smelter in Spain cut output of the metal used to make power cables and water pipes.


Inventories at warehouses monitored by the London Metal Exchange have fallen 4.8 percent in the past two days to 95,350 metric tons, less than two days' global demand. Workers at Atlantic, which last year produced 247,000 tons of finished copper, yesterday held the first of four one-day strikes planned for this month to protest 75 job cuts.


Copper is ``taking its cue from the stocks trend and ongoing supply problems in Spain,'' Robin Bhar, an analyst at Standard Bank in London, said in an e-mailed report.


Copper for delivery in three months rose $22, or 0.7 percent, to $3,001 a metric ton on the LME at 8:26 a.m., higher than any closing price since April 1. Copper's closing of $3,030 on March 1 was its highest in eight years.


Codelco, the world's biggest copper producer, may face a strike as soon as Oct. 8 by supervisors at its largest division who want improved benefits. The strike deadline was extended from yesterday at the Chilean company's request, union Treasurer Mario Sepulveda said.


The Codelco Norte division accounted for 53 percent of Codelco's copper output in the first half. A strike would reduce production at its smelter and hinder detonations that break up rock.


China's Demand


Copper has climbed 64 percent in the past year on surging demand from China, the world's biggest consumer of the metal. China, the fastest-growing of the world's 20 largest economies, uses about 30 percent of the copper it imports to make power cables needed to feed the country's demand for electricity.


Copper for December closed Sept. 30 on the Shanghai Futures Exchange at 29,180 yuan ($3,526) a ton. The exchange, where copper and aluminum trade, was shut today for China's three-day national holiday.


A copper deficit is forecast through at least next year. Global demand will grow 63 percent this year to 16.4 million tons, exceeding production by 428,000 tons, Goldman Sachs JBWere Pty said last month. Copper prices will average $2,838 a ton for the year, 38 percent more than in 2003, Bloomsbury Minerals Economics Ltd. said yesterday.


LME inventories may slump as low as 40,000 tons before expansion and new projects by companies including BHP Billiton create a surplus, the London-based consulting company said.


Other metals rose on the LME. Aluminum was up $2 to $1,835 a ton, nickel climbed $200 to $15,800 and zinc added $12 to $1,134. Lead rose $8 to $933 and tin jumped $30 to $9,080.


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A Snippet from "Around the Traps" by The Ferret:


The local resource companies had better watch out.

The Chinese may not be such big customers in the future.

They're starting to buy the mines themselves.

They're spending up big to ensure stable raw materials supplies.

Our Spanish-speaking staff member picked this up on one of the
Spanish news services.

Apparently Chinese state-owned corporation Minmetals Nonferrous
Metals Co has purchased two copper mines in Northern Chile for $US5
billion - Dona Ines de Collahuasi and Lomas Bayas, formerly owned by the
Canadian Noranda group.

As well, advanced talks have been reported between the Chinese
and officials of the Chilean Copper Corporation, Codelco.

China consumes almost 20 per cent of world's production.
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In reply to: thekiwi on Thursday 07/10/04 08:49am

I can see that the Ferret is right up on the laws of supply and demand and the workings of the free market.


One would think from reading that piece that the Chinese had brought the Chilean copper deposit into existence just by buying it.



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Copper up 33% for the year,


but most Aussie explorers with advanced copper projects are looking a bit of a yawn as far as SP goes. How long can this keep going - either copper price will plummet back to where it was, or SP's of junior copper companies will have to rise.


The copper gains are not quite as spectacular as those of nickel, but it does suggest we could see some copper companies getting a jolly good lift in their share prices once people re-calculate the numbers on their projects with a higher copper price.




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