Copper, Zinc Climb to Records in London Amid Supply Concern April 10 (Bloomberg) -- Copper rose to a record for a fourth consecutive day, leading a rally in metals as investors bet returns will beat those on stocks and bonds. Zinc climbed to an all-time high and nickel jumped to a level not seen in 17 years.
Production stoppages and rising demand in China and throughout Asia are exacerbating shortages of industrial and precious metals, prompting mutual and hedge funds to buy. Fund investments in commodities are forecast by Barclays Capital to climb by more than a third to $140 billion this year.
``The demand story is very robust,'' Alfred Wong, who helps manage $12 billion at UOB Asset Management, said by phone from Singapore today. ``We are quite upbeat.''
Copper for delivery in three months rose as much as $190, or 3.3 percent, to $5,915 a metric ton and traded at $5,910 as of 9:11 a.m. on the London Metal Exchange. Zinc jumped $79, or 2.8 percent, to $2,890 a ton after reaching $2,900 for the first time. Nickel climbed to $17,525, the highest since March 1989.
A strike at Grupo Mexico's La Caridad copper mine continued at the weekend with no intervention from the Mexican government, spokesman Juan Rebolledo said yesterday. The company is the world's No. 7 copper producer. The strike began March 24.
The Goldman Sachs Commodity Index, which includes copper, zinc and gold, has advanced 20 percent in the past year, double the gain in the Standard & Poor's 500 Index of stocks. Benchmark U.S. Treasuries have lost investors about 1.6 percent this year, according to Merrill Lynch & Co. indexes.
The booming economies of China and India are stoking demand for the raw materials needed for factories, cars and appliances. China's economy expanded 9.9 percent last year is headed for similar growth this year. Copper has risen 78 percent in the past 12 months. Zinc has more than doubled in price.
IMF Forecasts
The International Monetary Fund said last week it may raise its forecast for global economic growth this year. The world economy may expand 4.9 percent, it said April 3. It forecast on Sept. 21 that growth would be 4.3 percent.
``For the first time in 15 years, all major economies are growing together in both North America, China and Europe,'' said John Kemp, an analyst at Sempra Metals in London.
Kemp forecasts copper may rise to as high as $7,000 a metric ton this year. Gary Lampard, an analyst at Canaccord Capital Inc., Canada's largest independent brokerage, also increased price forecasts for base metals, according to a report released today. The gains are being ``heavily influenced by speculative activity,'' he wrote.
Copper inventory monitored by the LME has dropped for six consecutive trading days, shedding 8.3 percent to 111,800 tons. That's less than three days of global consumption.
Stockpiles tracked by the LME have plunged 53 percent in the past year to 267,650 tons, equal to less than 10 days of global consumption
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