Copper Rises to Highest in Four Months on Lower Stockpiles
By Halia Pavliva and Millie Munshi
April 3 (Bloomberg) -- Copper prices in New York jumped 3 percent to the highest in four months on declining stockpiles and concerns supplies from Peru may be disrupted.
Inventories monitored by the London Metal Exchange fell 0.7 percent today after dropping last week to the lowest since late December. Workers at the Doe Run plant in Peru went on strike yesterday, demanding higher pay, the Associated Press reported.
``The drop in stockpiles was fairly substantial,'' said Daniel Vaught, a commodity analyst at A.G. Edwards & Sons Inc. in St. Louis. ``The strike down in Peru is offering some support.''
Copper futures for May delivery surged 9.6 cents to $3.275 a pound at 9:58 a.m. on the Comex division of the New York Mercantile Exchange. Prices earlier reached $3.292, the highest since Dec. 5. Before today, prices had gained 29 percent from a year ago.
A futures contract is an obligation to buy or sell a commodity at a fixed price for delivery by a specific date.
Prices had climbed for four weeks in a row and rebounded 9.6 percent in the first quarter. Copper has more than quadrupled in the past four years on demand from China, the world's biggest user.
``The big thing in this market is just how strong the Chinese demand is going to be,'' Vaught said.
China buys about 20 percent of the 17 million metric tons of copper sold annually, while Asia as a whole accounts for about 50 percent of global demand, according to Prudential Equity Group LLP.
On the London Metal Exchange, copper for delivery in three months gained $220, or 3.2 percent, to $7,190 a metric ton ($3.26 a pound). Before today, prices had gained 10 percent this year.
MRX Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
