msn news: Copper closed up on Friday, notching its third consecutive week of gains, as short-term technical momentum and bullish demand prospects from China in the new year kept prices buoyant near all-time record peaks.
Copper bulls were unfazed by a broad-based drop in global equity markets and a rallying dollar, and instead focused on a positive stream of economic data that suggested improved demand conditions in the year ahead.
"All of the signals are there that we are going to see demand continue at a very brisk pace all throughout 2011," said Bill O'Neill, partner of LOGIC Advisors in Upper Saddle River, New Jersey.
"These markets have shown an ability over the course of the year to withstand moves in the euro/dollar relationship. I think the supply/demand fundamentals are strong enough to triumph, or continue to triumph," he said.
London Metal Exchange (LME) benchmark copper ended up $79 at $9,070 a tonne, nearly $200 away from its all-time record peak at $9,267.50 hit on Dec 14.
COMEX copper for March delivery climbed 4.30 cents, or 1 per cent, to settle at $4.1590 per lb.
On Tuesday, it hit its own all-time high at $4.2290.
Copper has rallied more than 50 per cent since early June, with much of the rise in recent weeks tied to speculation that China will return to the global copper market early next year after a period of destocking.
"Chinese re-stocking next year is possible and on the plus-side," Edward Meir, energy and metals analyst for MF Global in New York. "On the minus-side, continued tightening would crimp demand."
"We can maybe get to $10,000 as a high (in 2011) but if you get to $11,000 or $12,000, you're definitely going to have an impact on demand," he added.
"There will be more substitution - people will use more scrap."
In the currency markets, the euro came under pressure after Moody's Investors Service slashed Ireland's credit rating by five notches and warned further downgrades could follow if Ireland was unable to stabilise its debt situation.
A higher dollar makes metals priced in the US currency more expensive for holders of other currencies.
Stocks of copper in LME warehouses rose for the fifth day in a row. Latest data showed a small increase of 600 tonnes, to 361,400 tonnes. That is little more than seven days of global consumption, however.
Inventories in warehouses monitored by the Shanghai Futures Exchange rose 10 per cent on the week.
Overall, global stocks estimated at above 1.2 million tonnes account for more than three weeks of global consumption.
"When the Chinese come back into the market in the first or second quarter next year, copper will do very well," Michael Widmer, analyst at BoA Merrill Lynch said.
"Reported stocks could fall below one week's worth of demand next year, that's uncharted territory."
Widmer is expecting copper to average above $11,000 a tonne next year and is expecting global demand - estimated at around 19 million tonnes this year - to exceed supplies this year and next.
Concern about supplies is one reason for a premium - about $40 a tonne - for the cash contract over the three-month contract.
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