Copper Prices Rise to Six-Month High on Surging Chinese Imports...

Copper Prices Rise to Six-Month High on Surging Chinese Imports

By Millie Munshi and Halia Pavliva

April 10 (Bloomberg) -- Copper prices in New York rose to the highest in almost six months on signs of surging demand from China, the world's biggest consumer of the metal.

China's imports of copper and copper products rose 61 percent from a year earlier to 307,740 metric tons in March, the highest ever. Booming demand from China, the world's fastest- growing major economy, has sent prices soaring 43 percent since early February.

``Copper is very strong on insatiable Chinese demand and I don't see it going away anytime soon,'' said Matthew Zeman, a metals trader at LaSalle Futures Group in Chicago. ``Prices are going to go up from here.''

Copper futures for May delivery rose 2 cents, or 0.6 percent, to $3.526 a pound on the Comex division of the New York Mercantile Exchange, the highest closing price for a most-active contract since Oct. 16.

Prices may reach $3.80 a pound in the next 90 days as global growth remains strong, Zeman said. Copper, used in pipes and wires for homes, cars and appliances, generally moves in tandem with the economy.

On the London Metal Exchange, the metal surged to a seven- month high. Copper for delivery in three months gained $360, or 4.9 percent, to $7,700, after earlier trading at $7,898.75, the highest since Sept. 8.

`Not Unhealthy'

``The world economy is not unhealthy, so there is physical demand for copper,'' said Jim Wyckoff, senior markets analyst at TradingEducation.com in Wesley Chapel, Florida.

The International Monetary Fund predicts global gross domestic product will increase 4.9 percent this year, the fourth straight year of growth above 4.5 percent. That would be the best performance since at least 1980, when the fund started keeping records. The fund will release its updated forecast tomorrow.

Stockpiles of copper monitored by the LME, the world's biggest metals market, declined 0.8 percent to 177,600 metric tons today, the lowest since Dec. 20, according to Bloomberg data. Inventories have fallen 15 percent since the end of February.

Copper, which has gained for five straight weeks, may fall this week as the higher prices deter buyers and traders lock in profits, said Donald Selkin, director of equity research at Joseph Steven & Co.

``It's gotten a little bit ahead of itself and we're getting close to the near-term top,'' Selkin said. ``That doesn't mean we're going to be entering a bear market. It just needs to cool off a little bit.''

A futures contract is an obligation to buy or sell a commodity at a fixed price for delivery by a specific date.

To contact the reporter on this story: Millie Munshi in New York at [email protected] ; Halia Pavliva in New York at [email protected] .

Last Updated: April 10, 2007 14:01 EDT