BLBG: Copper Rises as Lowest Price Since 2006 Spurs Buying (Correct)
By Millie Munshi
(Corrects reference to lowest price in headline.)
Oct. 17 (Bloomberg) -- Copper rose, rebounding from its lowest price since January 2006, on speculation that plunging prices in the past five months may encourage buyers to step up purchases as mine disruptions threaten supply.
Miners demanding higher wages at Freeport-McMoRan Copper & Gold Inc., the world's biggest publicly traded copper producer, threatened to resume a strike at a mine in Peru next week. Before today, copper lost more than half its value since touching a record in May, on concern slowing global growth would stifle demand.
``Copper's gone lower than I thought it would and it's fallen very quickly,'' said Matthew Zeman, a trader at LaSalle Futures Group in Chicago. ``There's been a lot of liquidation already, so a lot of people have hit the sidelines now and are trying to figure out the next move.''
Copper futures for December delivery rose 7.55 cents, or 3.6 percent, to $2.161 a pound at 11:01 a.m. on the Comex division of the New York Mercantile Exchange. Yesterday, the metal touched $2.0405, the lowest for a most-active contract since Jan. 6, 2006. Copper reached a record $4.2605 on May 5.
Union members have gone on strike twice this year at Freeport's Cerro Verde, the third-largest copper mine in Peru. Leoncio Amudio, the general secretary of the mine's union, said on Oct. 15 that workers are pressing for an 11 percent wage increase.
Weaker Demand
Futures still are heading for a fifth straight weekly decline. Before today, copper was down 2.8 percent this week, after tumbling 33 percent in the previous four weeks. Traders have sold the metal as the outlook for global growth deteriorated, Zeman said.
Construction of U.S. single-family homes fell to the lowest level in 26 years, dropping 12 percent to a 544,000 annual rate in September, the Commerce Department said today. Builders are the biggest users of copper, accounting for about 46 percent of demand.
``The housing numbers today were lousy and it shows that there won't be a turnaround in housing anytime soon,'' Zeman said. ``Copper will continue to suffer until we stop seeing all of this extremely lousy economic data.''
On the London Metal Exchange, copper for delivery in three months added $155, or 3.3 percent, to $4,805 a metric ton ($2.18 a pound).
To contact the reporter on this story: Millie Munshi in New York at mmunshi@bloomberg.net.
