Copper Rises as Inventory Decline Exacerbates Supply Deficit
Sept. 20 (Bloomberg) -- Copper prices in New York rose as diminishing inventories heightened expectations that increased demand led by China will exacerbate a global supply deficit.
Global stockpiles monitored by the London Metal Exchange today fell 1,000 tons, all at warehouses in Singapore, for a 76 percent drop this year. Prices on China's Shanghai Futures Exchange have climbed 5.3 percent since Sept. 16, the biggest three-session rally since the end of May.
``Supplies are no better than they have been,'' said Michael Jaap, president of Copper Consulting Industries in Glendale, Arizona. ``We are looking for higher markets.''
Copper futures for December delivery rose 0.9 cent, or 0.7 percent, to $1.311 a pound at 9:47 a.m. on the Comex division of the New York Mercantile Exchange. Prices have climbed 58 percent in the past year.
Shares of Phelps Dodge Corp., the world's biggest publicly traded copper producer, rose 79 cents to $83.94 in New York Stock Exchange composite trading. The stock has gained 67 percent in the past year.
Global copper consumption exceeded supply by 682,000 metric tons from January to June, compared with a deficit of 363,000 tons a year earlier, the Lisbon-based International Copper Study Group said in a Sept. 8.
Speculators increased their holdings in copper futures as of Sept. 14, U.S. Commodity Futures Trading Commission data showed.
Hedge funds and other large speculators bought 15,167 more futures than they sold, up from 12,646 the previous week, the commission reported Sept. 17. A futures contract is an agreement to buy or sell a commodity at a specific price and date.
Charts are moving ``into closer agreement that the bull market so evident a year ago is in the process of resuming,'' Tim Evans, an analyst at IFR Markets in New York, said in a report Sept. 17. Copper last year soared 49 percent, the biggest increase since 1994, and reached an eight-year high of $1.403 in March.
To contact the reporter on this story: Claudia Carpenter in New York at [email protected].
To contact the editor responsible for this story: Steve Stroth at [email protected].
