BLBG: Copper Climbs in New York as Chile Temblor Spurs Supply Concern
Copper prices in New York increased for the first time in four days after an earthquake rattled parts of Chile, the world’s biggest supplier of the metal.
The magnitude-4.9 temblor struck about 320 kilometers (200 miles) south of Santiago at 9:56 a.m. local time, the U.S. Geological Survey said today. Before today, copper had plunged 67 percent from a record in May as a global recession curbed demand for the metal used in pipes and wires.
“The earthquake is why copper isn’t down today,” said Matthew Zeman, a trader at LaSalle Futures Group in Chicago. “Copper is trying to claw its way uphill. Barring any major supply disruption, it will have a hard time making a big move higher.”
Copper futures for March delivery gained 5.3 cents, or 3.8 percent, to $1.449 a pound at 11:41 a.m. on the New York Mercantile Exchange’s Comex division.
The metal extended gains after President Barack Obama pressed congressional leaders to reach a consensus on an $825 billion stimulus plan in a bid to revive growth.
“There is some optimism and some hope that the stimulus plan will take affect soon and help copper demand,” said Donald Selkin, the chief market strategist at National Securities Corp. in New York.
The metal’s rise was also propelled by lower prices that attracted consumers, Selkin said. The price touched $1.373 earlier today, the lowest for a most-active contract since Jan. 2.
‘Just A Bounce’
“Users may be looking to buy at these prices to replenish their supply,” Selkin said. “This is just a bounce within the bearish fundamentals. I don’t see this as the beginning of a bullish move for copper.”
The most-active copper contract is headed for its biggest weekly decline since December on speculation that the deepening global recession will further slash demand. The price dropped 8.6 percent this week before today.
China’s economic slowdown, already the deepest in seven years, is set to worsen, according to economists surveyed by Bloomberg News. The U.K. economy had the biggest contraction since 1980 during the fourth quarter, a report showed today. U.S. housing starts in December fell to a record low, the government said yesterday.
“All of the negative economic news is not painting a pretty picture on the demand side for copper,” LaSalle’s Zeman said. “The outlook doesn’t look too good.”
On the London Metal Exchange, copper for delivery in three months added $150, or 4.9 percent, to $3,240 a metric ton ($1.47 a pound). The price reached a record $8,940 on July 2.
