Copper climbs to highest price since March 1989

February 18, 2005|By BLOOMBERG NEWS

NEW YORK - Copper in New York surged yesterday to the highest price in almost 16 years on speculation that manufacturers in China are increasing purchases as the dollar falls.

Copper, priced in dollars, rose 39 percent last year as demand surged in China, the United States and Japan, the top three users of the metal.

Global demand has exceeded production from mines and scrap yards, eroding inventories monitored by the London Metal Exchange by 82 percent in the past year.

"The Chinese have to buy because they need it," said David Threlkeld, president of Resolved Inc., a copper-trading company in Scottsdale, Ariz. He said that last year China "essentially bought one year's consumption in three months. Now I think they're coming back again."

Copper futures for March delivery rose 4.6 cents, or 3.1 percent, to $1.4935 a pound on the Comex division of the New York Mercantile Exchange, the highest closing price for a most-active contract since March 1989.

Yesterday's rally was the second-biggest, after soybeans, among 17 commodities.

Demand for copper in China, the world's biggest consumer, will rise 8 percent this year to 3.7 million tons, more than a fifth of the global total, according to London-based GFMS Metals Consulting Ltd.

The most actively traded April contract rose 140 yuan yesterday to close at 30,120 yuan a ton. On Wednesday, the contract gained 3 percent, the maximum daily limit.

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