Copper Surges to Record in London, 31-Month High in N.Y. on Chinese Demand

Copper prices climbed to a record in London and closed at an all-time high in New York after China refrained from raising borrowing costs over the weekend, bolstering speculation that metal demand will continue to rise.
Last week, China increased reserve-requirement ratios for banks by half a percentage point amid accelerating inflation. The country, the world’s largest metal user, said on Dec. 10 that imports of copper and copper products gained for the first time in three months.


“The fact that China didn’t raise rates provided optimism,” said Phil Streible, a senior strategist at Lind- Waldock, a broker in Chicago. “We’re seeing a continuation of investor buying.”
Copper for delivery in three months gained $235, or 2.6 percent, to close at $9,225 ($4.18 a pound) at 6:11 p.m. on the London Metal Exchange. Earlier, the price reached $9,248, the highest ever.
The rally will continue next year, and copper at “$10,000 is definitely in sight,” said Daniel Briesemann, an analyst at Commerzbank AG in Frankfurt.

[Continued]
http://www.bloomberg.com/news/2010-12-13/copper-approaches-record-as-china-refrains-from-increasing-interest-rates.html

Investors to fuel copper surge to record

Reuters reported that copper prices are poised to hit record highs over coming months on strong fundamentals and surging investor demand which will be fuelled by new physical exchange traded products.

Investors have piled into commodities in recent weeks on expectations of further easing in the United States which will help boost growth and demand.

(Sourced from Reuters)

Copper mines would not meet demand growth - Rio Tinto - 16 Oct 2010

Saturday, 16 Oct 2010
Rio Tinto Limited said that planned copper mining projects will be unable to support demand growth at current rates and could see the market for mined copper in deficit for most of the next decade.

In slides presented at an industry conference in London, Mr Matthew Holcz GM business development of Rio Tinto Copper saw production from probable copper mining projects as only able to support annual demand growth of 3% per year by 2020.

If demand for mined copper grows at 5% per year, the market won't go back into surplus by 2020 even if all probable Greenfield projects go into production, pushing mined copper output from the current level of around 16 million tonnes to more than 22 million tonnes. Around 80% of global copper consumption comes from mined sources with the balance made up largely from scrap recycling.

In a report earlier this month, the International Copper Study Group estimated demand for the red metal will rise by 3.81% in 2010 and 4.49% in 2011.

Mr Holcz said that less than half of the world's copper supply in 2020 will come from low risk regions compared to nearly two thirds in 2000. High risk regions will account for 9% of global supply. Ore grades will also continue to decline toward 1% contained copper although at a slower rate to 2020 than over the past few decades while major new copper discoveries are increasingly deep below the surface.

Copper is seen as a barometer of global economic health but its rise to the highest levels since July 2008 has come despite renewed concerns around global economic growth.

Analysts believed that the weakening US dollar which raises the cost of dollar denominated commodities concerns about the performance of paper currencies and expectations of a supply deficit from next year have driven the metal's rise. Three month copper futures traded on the London Metal Exchange were USD 8,340 per tonne at 0015 GMT.

Average per person consumption of the metal will rise from around USD 12 to around USD 16 by 2020, Rio Tinto estimates. Consumption in developed economies plateaus around the USD 25 per head level.

http://www.steelguru.com/metals_news/Copper_mines_would_not_meet_demand_growth_-_Rio_Tinto/170216.html

Copper hits 2-year high on bullish miners

By Javier Blas and Jack Farchy in London

Published: October 12 2010 19:01 | Last updated: October 13 2010 09:59

Copper miners will struggle to meet soaring demand in 2011, the world’s two largest producers have warned, painting a bullish picture for the metal, which many senior traders and investors expect will reach a record within the next year.
Their upbeat comments, in video interviews with the Financial Times, came as copper prices this week hit a two-year high. In early trading at the London Metal Exchange, copper for delivery in three months hit of $8,415 a tonne on Wednesday, up 1 per cent.
The price of the metal, used widely in manufacturing, has risen nearly 40 per cent since early June and is within striking distance of the record of $8,940 set in mid-2008.

“The price will be strong because supply is challenged and demand will continue to be strong,” said Richard Adkerson, chief executive of US-based Freeport-McMoRan Copper and Gold , the world’s largest listed copper miner.

[continued]
http://www.ft.com/cms/s/0/4eab2164-d623-11df-81f0-00144feabdc0.html

Copper rises as China optimism returns

Hopes about long-term prospects reassert themselves day after country tightened monetary policy
Copper (HG-FT) closed up Wednesday as optimism about China's long-term growth prospects replaced fears from a day earlier stemming from the big Asian consumer's surprise monetary tightening.
CONT..
http://www.theglobeandmail.com/globe-investor/copper-rises-as-china-optimism-returns/article1429254/