copper to zoom as china buys/article

Copper May Rise for 2nd Week on China Buying (Correct)
(Corrects day when Shanghai Futures Exchange will resume trading in second paragraph.)

By Simon Casey and Claudia Carpenter

Feb. 14 (Bloomberg) -- Copper prices may rise for a second week in London and New York as buyers in China, the world's largest user of the metal, resume purchases after the Lunar New Year holidays.

Six of 14 traders and analysts surveyed by Bloomberg News on Feb. 10 and Feb. 11 said copper will rise. Five forecast a drop and three little change. The Shanghai Futures Exchange, which handles trading in copper contracts, was closed last week and will open Feb. 16.

Prices are ``going to zoom,'' said David Threlkeld, president of Resolved Inc., a copper-trading company in Scottsdale, Arizona. ``The Chinese are short copper for consumption and will be back in the market.''

Copper for delivery in three months rose 3.1 percent last week on the London Metal Exchange to $3,065 a metric ton. It fell 3.7 percent in the previous week. Copper for March ended at $1.4225 a pound on the Comex division of the New York Mercantile Exchange, up 3.4 percent for the week.

The majority of traders and analysts surveyed have correctly forecast the direction of copper prices in 24 of 33 weeks since the Bloomberg survey began.

Chinese Demand

Chinese copper demand grew 15 percent last year, Barclays Capital and Macquarie Bank estimate. It will rise 8 percent this year to 3.7 million tons, more than a fifth of the global total, according to London-based GFMS Metals Consulting Ltd. China's economy, which grew more than 9 percent last year, may boost imports more than one-third to 1.5 million tons.

``The main factor in copper is not our economy, not our housing market, but the Chinese economy,'' said Lawrence Edelson, an analyst at Weiss Research in Palm Beach Gardens, Florida. He forecast the metal will rise this week.

Global demand, led by China and the U.S., will exceed production by 74,000 tons this year, narrowing last year's gap of about 611,000 tons, JPMorgan Chase & Co. estimates.

Inventory monitored by the LME has climbed three straight weeks, gaining 6.3 percent last week to 54,225 tons. Mining companies such as Phelps Dodge Corp. and First Quantum Minerals Ltd. are boosting output after prices surged 37 percent in 2004.

Phoenix-based Phelps, the world's second-largest copper miner, this year will raise production by 108,000 tons. Vancouver-based First Quantum said last week it will expand output at a Zambian mine by two-thirds to more than 163,000 tons by 2007.

``Western world demand is likely to lessen somewhat this year and more mine production is in the offing,'' said William O'Neill, a partner at Logic Advisors LLC, a commodity consulting company in Upper Saddle River, New Jersey, who forecast that copper will fall.



To contact the reporter on this story:
Simon Casey in London at [email protected].;
Claudia Carpenter in New York at [email protected].

To contact the editor responsible for this story:
Stephen Farr at [email protected]
Last Updated: February 13, 2005 20:25 EST

http://www.bloomberg.com/apps/news?pid=10001013&sid=a0PM96QPHgKM&refer=commodity_futures

Its gonna be good for Base Metals all around.

cheers.