Fears of supply shortages drive copper futures higher

on Thursday, April 7, 2011

Fears of supply shortages drive copper futures higher  Copper futures climbed in trading on Thursday for the third straight day on speculation that quickly rising demand would further deplete global supplies. 

Copper, dubbed by some analysts as the "new gold" for its unprecedented rise in value, had the worst quarter in years the first three months of 2011 as global supplies rebounded. However, as a global economic recovery firmly takes hold, analysts have predicted supplies could fall through the rest of the year. Copper usage in China, which is the world's most voracious consumer of the metal, could climb faster than suppliers can keep up with, Rio Tinto Group said.

Supply issues are mostly conspiring to drive copper futures higher, TD Securities analyst Bart Melek told Bloomberg. "We are having a supply issue with the metal," Melek affirmed. "Our forecasts are talking about a 580,000-ton deficit. We continue to see Chinese authorities to be fairly benign in the way they attack monetary policy."

On the Comex in New York on Thursday, copper futures rose 1 percent, or 5 cents, to settle at $4.42 per pound. In London, copper for three-month delivery climbed 1.1 percent to $9,710 per metric ton. 

0 comments:

Post a Comment