LME copper hits new record and may climb further

on December 30th, 2010 at 9:18 am

December 30 2010 – According to www.commodityonline.com – Copper climbed to a record on the LME after a two day holiday and caught up with surge in other metals: aluminum and zinc.

Industrial metals, copper in particular, are going to be strong. Copper would go further heights on improved demand outlook from China, the largest buyer of copper. Analysts expect supply constraints to add to the rally, Bloomberg reported.

Three-month copper on the London Metal Exchange gained 1 % to trade at $9,437.50 a metric ton, exceeding the previous high of $9,392 reached Dec. 21. The contract was seen trading at $9,397.25 on 12:18 p.m. Singapore time, high by 27 % this year.

Copper futures on the Comex in New York slid 0.9 percent to get locked at $4.289 a pound after touching a record $4.3350 Tuesday. March contract on the Shanghai Futures Exchange proceeded north for a second day, increasing 0.6 percent to trade at 69,440 yuan ($10,482) per ton.

Copper inventories under the scanner of Shanghai Futures Exchange dipped 7,410 tons to reach 120,426 tons previous week (the biggest decrease since the week ending Sept. 9) even as inventories in LME warehouses currently are down 26 % this year end, well on track for the first annual decline since 2004.

But this rally when exceeding the limits would trigger inflationary pressures and could be causal for demand destruction and a case of substitution, said experts