London – Copper futures gained in London on Thursday for the first day in three amid falling inventories and forecasts of growing demand in China, the world's largest user of the metal found in power cables and plumbing.
Copper stockpiles monitored by exchanges in London, New York and Shanghai have plunged 77 percent this year to less than a week's global usage. BHP Billiton, the world's largest mining company, said expanding global demand will support metal prices.
“Broadly based world growth, China's strong demand growth and relatively low inventory levels suggest that commodity prices could be sustained at higher levels than experienced in recent years,'' chairman Don Argus said in the Melbourne-based company's annual report.
Copper for delivery in three months rose US$18, or 0.7 percent, to $2,785 a metric ton on the London Metal Exchange in early morning trade on Thursday. The metal fell 0.1 percent yesterday, its third straight drop.
China accounts for one fifth of copper consumption, according to the International Copper Study Group, based in Lisbon. Demand grew 26 percent in the first four months of 2004.
Inventories in warehouses registered by the LME, the Comex division of the New York Mercantile Exchange and the Shanghai Futures Exchange total 181,896 tons. Consumers have withdrawn copper from storage as analysts forecast demand will outpace production.
Global demand will rise 7.2 percent this year to 16.8 million tons, creating a deficit of 709,000 tons, Macquarie Bank estimates. Copper futures closed at an eight-year high on March 1 of $3,030.
My crystal ball says if Chinese growth stays steady we could see $US1.80/lb within six months.
There just aint no copper to be had.
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