Mining Profits...Investing In Industrial Metals

Copper prices rose in New York for the second-straight day on concern output by Chile's state-owned Codelco, the world's biggest producer, may be disrupted.

Codelco said yesterday a rockslide may occur at the Chuquicamata mine, the company's largest. A cave-in there last year cut output. Copper prices reached a record $4.04 a pound in May after strikes and mine accidents curbed production.

``Chile is still struggling to boost its output of copper and other non-ferrous metals, lagging behind producers in Africa and Asia,'' John Kemp, a London-based analyst at Sempra Metals, said in a report.

Copper futures for March delivery gained 4.25 cents, or 1.7 percent, to $2.5985 a pound at 9:13 a.m. on the Comex division of the New York Mercantile Exchange. Prices gained 1.1 percent yesterday, snapping a six-session slide.

Before today, the metal had dropped 11 percent this month after climbing 41 percent in 2006, the fifth-consecutive annual gain.

A futures contract is an obligation to buy or sell a commodity at a fixed price for a specific delivery date.

``I'm looking for a close above $2.70,'' said Win Chung, a trader at Triland USA Inc. in New York.

Inventories monitored by the London Metal Exchange rose 0.2 percent to 193,825 metric tons. Stockpiles fell 1.2 percent yesterday from the highest since March 2004.

``The Codelco story could cause some nervousness, but copper needs to put together a string of gains'' before buyers ``come back in any meaningful way,'' Edward Meir, an analyst at Man Financial Inc. in Darien, Connecticut, said in a report.

China

Copper users in China, the world's largest consumer of the metal, may rebuild stockpiles after prices tumbled, according to a Bloomberg survey yesterday of seven analysts, traders and processors.

China accounts for 20 percent of the annual world's copper consumption, while Asia accounts for 50 percent, John Tumazos, senior vice president at Prudential Equity Group LLP, said yesterday. The U.S. consumes about 13 percent of the metal, and Europe accounts for 20 percent of the annual consumption, he said.