Copper Rises on London Exchange on Declining Stockpiles, Output
By Chanyaporn Chanjaroen
April 24 (Bloomberg) -- Copper rose in
London as declining stockpiles and reduced production from Australia to Latin
America crimped supply. Tin advanced to a record for a fourth day.
Stockpiles at exchanges in London, New York and Shanghai have shrunk 25
percent this year, to less than four days of global demand. BHP Billiton Ltd.
said copper output dropped 8 percent in the first quarter from a year earlier
because of declines at Chile's Escondida, the world's largest copper mine, and
Olympic Dam in Australia.
``The market is quite short,'' said Andy McClelland, head of industrial
metals at Sucden (U.K.) Ltd. in London. Continued declines in stockpiles may
mean copper prices above $8,700 a metric ton, he said.
The contract for delivery in three months on the London Metal Exchange
advanced $85, or 1 percent, to $8,640 a ton as of 1:09 p.m. The contract traded
at a record $8,880 April 17.
Copper is in its seventh year of higher prices, buoying sales for
mining companies including Freeport-McMoRan Copper & Gold Inc. The world's
second-largest copper producer yesterday said first-quarter profit more than
doubled.
LME-monitored copper stockpiles fell 275 tons to 112,200 tons, the
exchange said today. Combined with those in Shanghai and New York, they total
178,776 tons, according to Bloomberg calculations.
Codelco, the world's biggest copper producer, agreed to pay advances on
2008 bonuses to striking workers from three of four unions for employees of
Codelco contractors at the El Teniente mine, Mining Minister Santiago Gonzalez
said yesterday. The offer was rejected by the Confederation of Copper Workers,
known as CTC, the union that started the strike.
Workers Walk Out
Contract workers walked out last week after demands for higher pay and
bonuses weren't met.
Tin gained as much as 2.2 percent to a record $24,602 a ton.
LME-monitored aluminum inventory expanded 11,900 tons, or 1.2 percent,
to 1.04 million tons, the highest since June 4, 2004. Prices dropped $16 to
$3,080.
Aluminum contracts expiring from July 2010 onwards declined April 22.
The contract expiring December 2009 is now the most expensive of all LME
aluminum futures, at $3,165 a ton, reflecting expectations for higher prices in
that period.
Traders are concerned that output problems in producing nations such as
South Africa and China may affect future supply, London-based analyst Michael
Widmer at Lehman Brothers Holdings Inc. said in a report yesterday.
Zinc supply will outpace demand by 215,000 tons this year, while lead
production will beat consumption by 26,000 tons, the Lisbon-based International
Lead and Zinc Study Group said today in a report. In October, the group
projected zinc oversupply of ``just under a quarter of a million tons'' and ``a
close balance'' in lead.
Lead dropped $44, or 1.6 percent, to $2,765 a ton and zinc added $6 to
$2,245. Nickel rose $150 to $28,850.
To contact the reporter on this story: Chanyaporn Chanjaroen in London
at [EMAIL PROTECTED]
Last Updated: April 24, 2008 08:23 EDT
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