Mining company Freeport-McMoRan Copper & Gold Inc. said Tuesday that third-quarter earnings more than doubled on sharply higher copper and gold prices.
Net income rose to $350.7 million, $1.67 per share, from $165.8 million, or 86 cents per share, a year ago. Excluding charges and gains on debt reduction, preferred share redemption and land sales, the company earned $1.73 per share in the latest period.
Revenue grew to $1.64 billion from $983.3 million last year.
Analysts surveyed by Thomson Financial were looking for profit of $1.59 per share on sales of $1.31 billion.
The company said average realized prices per pound of copper rose to $3.43 from $1.73 last year, and to $3.38 from $1.67 for gold.
Third-quarter sales for PT Freeport Indonesia, the company's Indonesian mining unit, totaled 323.6 million pounds of copper and 478.0 thousand ounces of gold, down from last year's sales, but above revised estimates the company supplied in July of 280.0 million pounds of copper and 320.0 thousand ounces of gold. The higher-than-expected sales reflect the mining of a high-grade section of the Grasberg pit previously scheduled to be mined in future periods.
The company forecasts annual sales for 2006 of about 1.2 billion pounds of copper and 1.7 million ounces of gold, including 415 million pounds of copper and 470 thousand ounces of gold estimated for the fourth quarter.
Tuesday, October 17, 2006
Copper futures in Shanghai rose as hedge and investment funds increased buying base metals amid concern supply for copper may not meet demand. Aluminum surged.
Codelco, the world's largest copper producer, said Oct. 11 demand for the metal used in wires and pipes is strong and inventories are low. The metal jumped 5.1 percent in London yesterday, nickel rose to the highest in at least 19 years and tin rose to the most in at least 17 years.
``Copper is surging on both the supply and the funds perspective,'' Li Xun, a trader at Shanghai Continent Futures Co, said today. ``Funds are returning to base metals, pushing up other metals, notably tin and nickel.''
Copper for December delivery surged 2,420 yuan, or 3.5 percent, to settle at 72,270 yuan ($9,139) a metric ton on the Shanghai Futures Exchange. The contract rose by as much as 3.9 percent, hitting the price movement limit of 4 percent.
Copper for immediate delivery in Changjiang, Shanghai's biggest spot copper market, advanced as much as 1,650 yuan, or 2.3 percent, to 72,500 yuan a ton.
Output of copper from mines has lagged behind growth in demand, bolstering prices that climbed to a record this year, Jose Pablo Arellano, executive president of Codelco, the world's largest copper producer, said last week.
Codelco, owned by Chile's government, may produce less than its June forecast for 1.7 million metric tons after a rockslide in July at its largest mine, Arellano said. The company last year produced 11 percent of the copper from mines worldwide.
In addition, the company will start contract talks next month with workers at Codelco Norte, the company's largest division, chairwoman of Codelco Poniachik said last week.
``Supply of copper remains vulnerable to Codelco's coming contract talks, which we are closely following,'' said Li.
Metal for three-month delivery on the London Metal Exchange rose $17, or 0.2 percent, to trade at $7,785 at 3:28 p.m. Shanghai time.
Codelco, the world's largest copper producer, said Oct. 11 demand for the metal used in wires and pipes is strong and inventories are low. The metal jumped 5.1 percent in London yesterday, nickel rose to the highest in at least 19 years and tin rose to the most in at least 17 years.
``Copper is surging on both the supply and the funds perspective,'' Li Xun, a trader at Shanghai Continent Futures Co, said today. ``Funds are returning to base metals, pushing up other metals, notably tin and nickel.''
Copper for December delivery surged 2,420 yuan, or 3.5 percent, to settle at 72,270 yuan ($9,139) a metric ton on the Shanghai Futures Exchange. The contract rose by as much as 3.9 percent, hitting the price movement limit of 4 percent.
Copper for immediate delivery in Changjiang, Shanghai's biggest spot copper market, advanced as much as 1,650 yuan, or 2.3 percent, to 72,500 yuan a ton.
Output of copper from mines has lagged behind growth in demand, bolstering prices that climbed to a record this year, Jose Pablo Arellano, executive president of Codelco, the world's largest copper producer, said last week.
Codelco, owned by Chile's government, may produce less than its June forecast for 1.7 million metric tons after a rockslide in July at its largest mine, Arellano said. The company last year produced 11 percent of the copper from mines worldwide.
In addition, the company will start contract talks next month with workers at Codelco Norte, the company's largest division, chairwoman of Codelco Poniachik said last week.
``Supply of copper remains vulnerable to Codelco's coming contract talks, which we are closely following,'' said Li.
Metal for three-month delivery on the London Metal Exchange rose $17, or 0.2 percent, to trade at $7,785 at 3:28 p.m. Shanghai time.
Monday, October 16, 2006
Copper futures in New York charged to a 2-1/2-week high early Monday, fueled by chart-based buying after prices penetrated key technical points, sources said.
"The buying that has come in this morning has not been that sizable ... there just wasn't anything standing in its way on the way up. Some (buy) stops were set off above $3.50, which took us up to the highs, but that is about it," said one floor dealer.
By 10:34 a.m. EDT (1434 GMT), copper for December delivery rallied 10.50 cents, or 3 percent, at $3.5185 a lb. on the New York Mercantile Exchange's COMEX division, moving between $3.3960 and $3.5250, its loftiest level since Sept. 27.
Floor dealers noted the Sept. 27 peak at $3.54 would be the next short-term target for the market to hurdle before making a run at $3.60.
Spot October climbed 9.15 cents to its morning peak at $3.49.
Volume at 10 a.m. was estimated at 5,000 lots.
The ongoing strength in the rest of the base metals complex was seen offering support to the copper market as the overall tightness in the group bolstered the bullish sentiment.
Three-months tin, three-months nickel and lead futures all rallied to a new contract highs on the London Metal Exchange on Monday. [nL16619962]
"Indeed, with equities also putting in solid gains, and with oil and gold pointing higher again, it looks as though there is a broad-based sense of optimism running through the markets," said William Adams, metals analyst with BaseMetals.com
However, slack demand from China, the world's largest consumer of the red metal, continued to plague upside momentum.
China imported 39.6 percent less refined copper and alloy in the first nine months than in the year-ago period, official Customs figures showed on Monday. Exports jumped 232.4 percent over the same period. [nPEK329314]
Inventory data showed London Metal Exchange-monitored warehouse stocks rose 475 tonnes to 114,600 tonnes on Monday, while COMEX stocks rose 1,008 short tons to 23,210 tons on Friday.
The latest weekly Commitments of Traders data issued by the Commodity Futures Trading Commission showed the speculative short position in the market grew 8 percent in the week ended Oct. 10.
Noncommercial players in copper -- mostly speculators -- held a net short position of 13,287 contracts as of Tuesday, up from 12,293 contracts a week earlier.
Robin Bhar, metals analyst at investment bank UBS, noted this was the largest net short position in COMEX copper futures since October 2002, and suggested that concerns over a global economic slowdown were likely influencing the bearish short position.
LME three-months copper surged $255 to $7,715 a tonne by the midday point, compared with a Friday settlement at $7,460 a tonne.
"The buying that has come in this morning has not been that sizable ... there just wasn't anything standing in its way on the way up. Some (buy) stops were set off above $3.50, which took us up to the highs, but that is about it," said one floor dealer.
By 10:34 a.m. EDT (1434 GMT), copper for December delivery
Floor dealers noted the Sept. 27 peak at $3.54 would be the next short-term target for the market to hurdle before making a run at $3.60.
Spot October
Volume at 10 a.m. was estimated at 5,000 lots.
The ongoing strength in the rest of the base metals complex was seen offering support to the copper market as the overall tightness in the group bolstered the bullish sentiment.
Three-months tin
"Indeed, with equities also putting in solid gains, and with oil and gold pointing higher again, it looks as though there is a broad-based sense of optimism running through the markets," said William Adams, metals analyst with BaseMetals.com
However, slack demand from China, the world's largest consumer of the red metal, continued to plague upside momentum.
China imported 39.6 percent less refined copper and alloy in the first nine months than in the year-ago period, official Customs figures showed on Monday. Exports jumped 232.4 percent over the same period. [nPEK329314]
Inventory data showed London Metal Exchange-monitored warehouse stocks rose 475 tonnes to 114,600 tonnes on Monday, while COMEX stocks rose 1,008 short tons to 23,210 tons on Friday.
The latest weekly Commitments of Traders data issued by the Commodity Futures Trading Commission showed the speculative short position in the market grew 8 percent in the week ended Oct. 10.
Noncommercial players in copper -- mostly speculators -- held a net short position of 13,287 contracts as of Tuesday, up from 12,293 contracts a week earlier.
Robin Bhar, metals analyst at investment bank UBS, noted this was the largest net short position in COMEX copper futures since October 2002, and suggested that concerns over a global economic slowdown were likely influencing the bearish short position.
LME three-months copper
Friday, October 13, 2006
Higher-than-normal copper prices characterized the third quarter and are expected to boost copper miner earnings when producers report quarterly results over the next two weeks or so, analysts say.
Copper miners have been blessed with a run-up in copper prices unseen since the contract started trading on the New York Mercantile Exchange in 1988. The metal settled at an all-time high of $4.0755 a pound on May 23, as demand from fast-growing economies such as India and China helped keep supply tight. Although copper prices retreated somewhat in the third quarter, copper prices still averaged about $3.50, according to an estimate by Morgan Stanley analyst Mark Liinamaa.
The analyst resumed coverage of Phelps Dodge Corp. earlier this month, saying he remains "firmly in the bullish camp for copper's long-term fundamentals" and forecasting strong earnings and cash flow over the next two to four years. Liinamaa offered a similar outlook for Freeport McMoran Copper and Gold Inc. when he raised his third-quarter profit estimates earlier this month, largely based on an increased copper price forecast.
In a recent report, Friedman Billings Ramsey analyst Amir Arif said he expects "copper names will beat current expectations" in the third quarter.
Phoenix-based Phelps Dodge is scheduled to report third-quarter earnings on Tuesday, Oct. 24. Freeport McMoran, headquartered in New Orleans, is expected to report quarterly results on Tuesday, Oct. 17.
Copper prices during the quarter were also supported in part by work stoppages, as several companies faced prolonged strikes by miners.
Workers at Chile's Escondida mine _ which generates about 8 percent of the world's copper output _ ended a 25-day strike on Aug. 31 after securing a 5 percent wage raise and bonuses totaling about $16,600 for each worker. The mine is majority-owned by Australia's BHP Billiton Ltd., which earned $10.45 billion for the year through June, an Australian corporate profit record. The company reports financial results only at the mid-year and year-end periods.
Grupo Mexico SA subsidiary Southern Copper Corp. endured a more than monthlong strike at Mexico's largest copper mine, Cananea, and a roughly three-month strike at another copper mine, La Caridad. Both ended in late July. Citigroup analyst Rafael Pablo Urquia has said he expects the effects of the stoppages to show up in Southern Copper's third-quarter report.
Southern Copper, with headquarters in Peru and a U.S. base in Phoenix, is slated to report third-quarter results at the end of the month.
Stock prices for major copper producers retreated sharply early in the quarter following May's peak copper prices. Phelps Dodge shares recovered and rose 3 percent over the third quarter. Freeport McMoran shares ended the quarter down 4 percent over the three-month period. Southern Copper shares advanced 4 percent at the same time.
Copper miners have been blessed with a run-up in copper prices unseen since the contract started trading on the New York Mercantile Exchange in 1988. The metal settled at an all-time high of $4.0755 a pound on May 23, as demand from fast-growing economies such as India and China helped keep supply tight. Although copper prices retreated somewhat in the third quarter, copper prices still averaged about $3.50, according to an estimate by Morgan Stanley analyst Mark Liinamaa.
The analyst resumed coverage of Phelps Dodge Corp. earlier this month, saying he remains "firmly in the bullish camp for copper's long-term fundamentals" and forecasting strong earnings and cash flow over the next two to four years. Liinamaa offered a similar outlook for Freeport McMoran Copper and Gold Inc. when he raised his third-quarter profit estimates earlier this month, largely based on an increased copper price forecast.
In a recent report, Friedman Billings Ramsey analyst Amir Arif said he expects "copper names will beat current expectations" in the third quarter.
Phoenix-based Phelps Dodge is scheduled to report third-quarter earnings on Tuesday, Oct. 24. Freeport McMoran, headquartered in New Orleans, is expected to report quarterly results on Tuesday, Oct. 17.
Copper prices during the quarter were also supported in part by work stoppages, as several companies faced prolonged strikes by miners.
Workers at Chile's Escondida mine _ which generates about 8 percent of the world's copper output _ ended a 25-day strike on Aug. 31 after securing a 5 percent wage raise and bonuses totaling about $16,600 for each worker. The mine is majority-owned by Australia's BHP Billiton Ltd., which earned $10.45 billion for the year through June, an Australian corporate profit record. The company reports financial results only at the mid-year and year-end periods.
Grupo Mexico SA subsidiary Southern Copper Corp. endured a more than monthlong strike at Mexico's largest copper mine, Cananea, and a roughly three-month strike at another copper mine, La Caridad. Both ended in late July. Citigroup analyst Rafael Pablo Urquia has said he expects the effects of the stoppages to show up in Southern Copper's third-quarter report.
Southern Copper, with headquarters in Peru and a U.S. base in Phoenix, is slated to report third-quarter results at the end of the month.
Stock prices for major copper producers retreated sharply early in the quarter following May's peak copper prices. Phelps Dodge shares recovered and rose 3 percent over the third quarter. Freeport McMoran shares ended the quarter down 4 percent over the three-month period. Southern Copper shares advanced 4 percent at the same time.
Copper futures in New York settled down but off their session lows on Thursday, garnering support from a softer dollar and a slight rebound in the energy markets, sources said.
"It seemed to me the copper market probably rallied in concert with the early session gains in the energy complex after the Department of Energy report was released," said Dan Vaught, futures analyst with A.G. Edwards.
Copper for December delivery ended down 2.35 cents at $3.3865 a lb on the New York Mercantile Exchange's COMEX division, after dealing from an early low of $3.3350 to a session peak at $3.4290.
Since plummeting below $3.00 in mid-June, the benchmark December copper contract has been stuck in a wide trading band roughly between $3.20 and $3.70, with concerns of a deteriorating macroeconomic picture limiting the upside.
"If we start spending some more time below $3.40, that's pretty much right around the 100-day moving average, technically speaking, and that could spell the end of what has been a bull market and trade back down to lower lows," said one market technician.
Spot October lost 2.60 cents to finish the day at $3.3740, while the rest of the board closed with losses ranging from 2.35 to 3.40.
COMEX final copper volume was estimated at 10,000 lots, almost double that of Wednesday's 5,822 lots.
"A lot of the speculative interest has left this market, especially after the failure to get back above $3.50, but every time we dip back down near the $3.30 level, the buyers come back in," said one COMEX floor dealer.
Overseas selling weighed on the COMEX open, as Chinese import data continued to show limited demand from the world's largest copper consumer.
Official preliminary data for September showed imports of copper, including semi-finished products, fell 23.6 percent to 1.52 million tonnes in the first nine months.
In September, imports of copper, including semi-finished products, stood at 174,931 tonnes. The figure was 5.2 percent less than one month earlier.
"China's copper imports have been much weaker this year a trend we attribute to destocking by consumers and sales by the SRB (State Reserves Bureau), with smelters keen to boost scrap and concentrate imports in order to boost domestic refined production," said Robin Bhar, metals analyst with investment bank UBS.
In currencies, the dollar fell slightly against the euro on Thursday after a report unexpectedly showed a record U.S. trade deficit in August.
The U.S. trade deficit widened to $69.86 billion in August from a revised $68 billion in July, surpassing expectations of a narrowing to $66.7 billion.
In afternoon trade, the euro was firmer at around $1.2545, but still had the scope to retest the 2-1/2 month lows at around $1.2500 hit on Wednesday.
Meanwhile, London Metal Exchange-monitored warehouse stocks rose 100 tonnes to 114,000 tonnes on Thursday, while COMEX stocks rose 786 short tons to 22,354 tons on Wednesday.
LME three-months copper eased $25 at the close to $7,490 a tonne, against a Wednesday settlement of $7,515.
"It seemed to me the copper market probably rallied in concert with the early session gains in the energy complex after the Department of Energy report was released," said Dan Vaught, futures analyst with A.G. Edwards.
Copper for December delivery
Since plummeting below $3.00 in mid-June, the benchmark December copper contract has been stuck in a wide trading band roughly between $3.20 and $3.70, with concerns of a deteriorating macroeconomic picture limiting the upside.
"If we start spending some more time below $3.40, that's pretty much right around the 100-day moving average, technically speaking, and that could spell the end of what has been a bull market and trade back down to lower lows," said one market technician.
Spot October
COMEX final copper volume was estimated at 10,000 lots, almost double that of Wednesday's 5,822 lots.
"A lot of the speculative interest has left this market, especially after the failure to get back above $3.50, but every time we dip back down near the $3.30 level, the buyers come back in," said one COMEX floor dealer.
Overseas selling weighed on the COMEX open, as Chinese import data continued to show limited demand from the world's largest copper consumer.
Official preliminary data for September showed imports of copper, including semi-finished products, fell 23.6 percent to 1.52 million tonnes in the first nine months.
In September, imports of copper, including semi-finished products, stood at 174,931 tonnes. The figure was 5.2 percent less than one month earlier.
"China's copper imports have been much weaker this year a trend we attribute to destocking by consumers and sales by the SRB (State Reserves Bureau), with smelters keen to boost scrap and concentrate imports in order to boost domestic refined production," said Robin Bhar, metals analyst with investment bank UBS.
In currencies, the dollar fell slightly against the euro on Thursday after a report unexpectedly showed a record U.S. trade deficit in August.
The U.S. trade deficit widened to $69.86 billion in August from a revised $68 billion in July, surpassing expectations of a narrowing to $66.7 billion.
In afternoon trade, the euro
Meanwhile, London Metal Exchange-monitored warehouse stocks rose 100 tonnes to 114,000 tonnes on Thursday, while COMEX stocks rose 786 short tons to 22,354 tons on Wednesday.
LME three-months copper
Thursday, October 12, 2006
Shanghai copper futures recovered slightly in light trading on Thursday, after low stocks helped support the rise in base metal prices in London on Wednesday.
Traders' focus shifted to low copper stocks in London and Shanghai warehouses, helping to support copper despite bearish expectations for Chinese refined copper demand growth this year.
Higher prices for nickel and lead also lent support to copper.
Shanghai's most active copper contract, December, ended up 0.7 percent at 69,820 yuan a tonne, boosted by slight gains in London on Wednesday.
Spot copper prices in eastern China traded between 70,950 and 71,270 yuan, up 135 yuan from Wednesday.
Copper for delivery in three months on the London Metal Exchange retreated 0.5 percent to $7,475 a tonne, after rising on Wednesday to close at $7,515 a tonne.
Customs data showed that China's purchases of the metal have receded in the first three quarters. Chinese imports of copper, including semi-finished products, fell 23.6 percent from a year earlier to 1.5 million tonnes in the first nine months of this year, data showed on Thursday
But China imported 528,953 tonnes of scrap copper in September, 30 percent higher than in August.
"Mounting international copper prices have encouraged Chinese fabricators to import more scrap copper for production," said an official at Jiangxi Copper, China's largest producer.
Part of the reason for the lower refined copper imports is that Chinese smelters, including Jiangxi, are expanding.
"We forecast that China's demand, especially for copper concentrate, will stay strong, as domestic smelters are expanding smelting capacity," the official said.
LME three-month aluminium was unchanged on Thursday at $2,600 a tonne.
Shanghai aluminium futures rose slightly, with the most active contract, December, ending up 1.1 percent at 20,150 yuan a tonne.
"Aluminium warehouses in Shanghai fell in recent months as traders continued to export the metal due to higher overseas prices. The low stocks may cause a price hike," said Cai Luoyi, an analyst at China International Futures Corp. in Shanghai.
Nickel was quoted at $30,115 after closing at $30,100 on Wednesday. Earlier this week, it hit a record high of $30,250.
Lead was quoted at $1,443 on Thursday, compared with $1,455 at the previous day's close. Traders said fresh fund buying had been triggered after news that China was aiming to limit production of lead to 4 million tonnes by 2010.
China will also move to limit refined zinc production at 5 million tonnes by 2010. Zinc added $15 to $3,800 a tonne on Thursday.
Traders' focus shifted to low copper stocks in London and Shanghai warehouses, helping to support copper despite bearish expectations for Chinese refined copper demand growth this year.
Higher prices for nickel and lead also lent support to copper.
Shanghai's most active copper contract, December, ended up 0.7 percent at 69,820 yuan a tonne, boosted by slight gains in London on Wednesday.
Spot copper prices in eastern China traded between 70,950 and 71,270 yuan, up 135 yuan from Wednesday.
Copper for delivery in three months on the London Metal Exchange retreated 0.5 percent to $7,475 a tonne, after rising on Wednesday to close at $7,515 a tonne.
Customs data showed that China's purchases of the metal have receded in the first three quarters. Chinese imports of copper, including semi-finished products, fell 23.6 percent from a year earlier to 1.5 million tonnes in the first nine months of this year, data showed on Thursday
But China imported 528,953 tonnes of scrap copper in September, 30 percent higher than in August.
"Mounting international copper prices have encouraged Chinese fabricators to import more scrap copper for production," said an official at Jiangxi Copper, China's largest producer.
Part of the reason for the lower refined copper imports is that Chinese smelters, including Jiangxi, are expanding.
"We forecast that China's demand, especially for copper concentrate, will stay strong, as domestic smelters are expanding smelting capacity," the official said.
LME three-month aluminium was unchanged on Thursday at $2,600 a tonne.
Shanghai aluminium futures rose slightly, with the most active contract, December, ending up 1.1 percent at 20,150 yuan a tonne.
"Aluminium warehouses in Shanghai fell in recent months as traders continued to export the metal due to higher overseas prices. The low stocks may cause a price hike," said Cai Luoyi, an analyst at China International Futures Corp. in Shanghai.
Nickel was quoted at $30,115 after closing at $30,100 on Wednesday. Earlier this week, it hit a record high of $30,250.
Lead was quoted at $1,443 on Thursday, compared with $1,455 at the previous day's close. Traders said fresh fund buying had been triggered after news that China was aiming to limit production of lead to 4 million tonnes by 2010.
China will also move to limit refined zinc production at 5 million tonnes by 2010. Zinc added $15 to $3,800 a tonne on Thursday.
Wednesday, October 11, 2006
Alcoa Inc., the world's biggest aluminum maker, said rising prices boosted third-quarter profit by 86 percent. Earnings were lower than analysts estimated as unplanned shutdowns hurt output, sending the shares plunging.
Net income rose to $537 million, or 61 cents a share, from $289 million, or 33 cents, a year earlier, New York-based Alcoa said today in an e-mailed statement. The average estimate of 16 analysts surveyed by Thomson Financial was 77 cents. Sales rose 19 percent to $7.63 billion.
The shares fell $1.69, or 6 percent, $26.60 at 7:24 p.m. in New York after Alcoa said aluminum production fell to 895,000 tons in the quarter from 904,000 tons a year earlier. Lower output eroded the benefit of a 33 percent rally in the price of metal from Alcoa's smelters. Chief Financial Officer Joseph C. Muscari said defective equipment was been repaired.
``The earnings were a disappointment,'' said Charles Bradford, an analyst at Soleil Securities in New York. ``The plant outages were significant and there was a whole series of little things impacting the result. They came in strong in the second quarter and maybe that set us up for being too optimistic.''
Operating profit from raw aluminum sales doubled to $346 million from $168 million, as Alcoa sold metal on average at $2,620 a metric ton, up from $1,963 a year earlier. Prices were less than the average of $2,530 on the London Metal Exchange. The profit for alumina, a white powder that's used to make aluminum, rose 74 percent to $271 million.
Flat-Rolled Products
The flat-rolled products unit reported a 41 percent drop in operating profit to $48 million because of seasonal shutdowns and mill outages. Alcoa also said it made a ``discretionary'' $200 million pension payment.
Alcoa is the first company in the Dow Jones Industrial Average to report third-quarter profit.
Maintenance at the company's Kitts Green facility, which supplies aerospace components that carry high profit margins, took about 10 days longer than expected and reduced income from continuing operations by $11 million, with other shutdowns cost the company another $13 million, Alcoa said.
Improved Outlook
``We are positive about underlying demand for the fourth quarter, with the exception of the automotive and housing markets,'' Muscari said on a conference call with analysts and investors.
Aluminum prices surged to the highest in at least 19 years in May as output failed to keep pace with increased demand from makers of containers and building materials. Rising prices helped boost Alcoa shares by 25 percent in the past year, reaching a two-year high of $36.96 on May 11.
Alcan Inc., the world's second-largest producer, forecast a global supply deficit of about 300,000 tons of primary aluminum in 2006. Consumption will increase 6.8 percent, compared with a 5.7 percent increase in output, the company said Aug. 5.
Aluminum reached a 19-year high of $3,310 a ton on the LME in May. Aluminum for delivery in three months fell $35 to $2,585 today.
``We have prices about twice the long-term historical average for aluminum, which is quite positive for producers of aluminum,'' said Jim Southwood, president of Commodity Metals Management Co. in Wexford, Pennsylvania. ``The risk is on the demand side, where these high prices could be adversely affecting demand.''
Rising costs to run smelters in North America has forced Alcoa Chief Executive Officer Alain Belda to shift production to countries such as Iceland, where energy costs are lower.
Russian Rival
OAO Russian Aluminium, which said yesterday it agreed to buy smaller producer OAO Sual Group, will eclipse Alcoa as the world's biggest aluminum company by output once the transaction is completed. The new business, which will be known as United Company Rusal, will produce about 4 million tons a year. Alcoa had output of 3.55 million tons last year.
Rusal will also produce 11 million tons a year of alumina, which is produced by processing bauxite and then refined into pure aluminum. Alcoa produces 14.6 million tons per year of Alumina.
The combined entity ``in the longer term could increase the competition for top-tier growth projects,'' BMO's Lazarovici said in a note to investors today. ``This could adversely impact the western world aluminum producers and accelerate the industry's consolidation.''
Four to five tons of bauxite yields about two tons of alumina and one ton of aluminum. Bauxite is a rock found mostly in tropical and sub-tropical regions. Alumina is refined from bauxite and converted to pure aluminum.
Net income rose to $537 million, or 61 cents a share, from $289 million, or 33 cents, a year earlier, New York-based Alcoa said today in an e-mailed statement. The average estimate of 16 analysts surveyed by Thomson Financial was 77 cents. Sales rose 19 percent to $7.63 billion.
The shares fell $1.69, or 6 percent, $26.60 at 7:24 p.m. in New York after Alcoa said aluminum production fell to 895,000 tons in the quarter from 904,000 tons a year earlier. Lower output eroded the benefit of a 33 percent rally in the price of metal from Alcoa's smelters. Chief Financial Officer Joseph C. Muscari said defective equipment was been repaired.
``The earnings were a disappointment,'' said Charles Bradford, an analyst at Soleil Securities in New York. ``The plant outages were significant and there was a whole series of little things impacting the result. They came in strong in the second quarter and maybe that set us up for being too optimistic.''
Operating profit from raw aluminum sales doubled to $346 million from $168 million, as Alcoa sold metal on average at $2,620 a metric ton, up from $1,963 a year earlier. Prices were less than the average of $2,530 on the London Metal Exchange. The profit for alumina, a white powder that's used to make aluminum, rose 74 percent to $271 million.
Flat-Rolled Products
The flat-rolled products unit reported a 41 percent drop in operating profit to $48 million because of seasonal shutdowns and mill outages. Alcoa also said it made a ``discretionary'' $200 million pension payment.
Alcoa is the first company in the Dow Jones Industrial Average to report third-quarter profit.
Maintenance at the company's Kitts Green facility, which supplies aerospace components that carry high profit margins, took about 10 days longer than expected and reduced income from continuing operations by $11 million, with other shutdowns cost the company another $13 million, Alcoa said.
Improved Outlook
``We are positive about underlying demand for the fourth quarter, with the exception of the automotive and housing markets,'' Muscari said on a conference call with analysts and investors.
Aluminum prices surged to the highest in at least 19 years in May as output failed to keep pace with increased demand from makers of containers and building materials. Rising prices helped boost Alcoa shares by 25 percent in the past year, reaching a two-year high of $36.96 on May 11.
Alcan Inc., the world's second-largest producer, forecast a global supply deficit of about 300,000 tons of primary aluminum in 2006. Consumption will increase 6.8 percent, compared with a 5.7 percent increase in output, the company said Aug. 5.
Aluminum reached a 19-year high of $3,310 a ton on the LME in May. Aluminum for delivery in three months fell $35 to $2,585 today.
``We have prices about twice the long-term historical average for aluminum, which is quite positive for producers of aluminum,'' said Jim Southwood, president of Commodity Metals Management Co. in Wexford, Pennsylvania. ``The risk is on the demand side, where these high prices could be adversely affecting demand.''
Rising costs to run smelters in North America has forced Alcoa Chief Executive Officer Alain Belda to shift production to countries such as Iceland, where energy costs are lower.
Russian Rival
OAO Russian Aluminium, which said yesterday it agreed to buy smaller producer OAO Sual Group, will eclipse Alcoa as the world's biggest aluminum company by output once the transaction is completed. The new business, which will be known as United Company Rusal, will produce about 4 million tons a year. Alcoa had output of 3.55 million tons last year.
Rusal will also produce 11 million tons a year of alumina, which is produced by processing bauxite and then refined into pure aluminum. Alcoa produces 14.6 million tons per year of Alumina.
The combined entity ``in the longer term could increase the competition for top-tier growth projects,'' BMO's Lazarovici said in a note to investors today. ``This could adversely impact the western world aluminum producers and accelerate the industry's consolidation.''
Four to five tons of bauxite yields about two tons of alumina and one ton of aluminum. Bauxite is a rock found mostly in tropical and sub-tropical regions. Alumina is refined from bauxite and converted to pure aluminum.
Tuesday, October 10, 2006
Copper futures in New York were lower at the open on Tuesday, reversing the prior session's strength, as concerns over demand growth from the world's largest copper consumer weighed on sentiment, sources said.
"Chinese demand this year has not been what it was the last couple of years. The Chinese would rather tap into domestic stockpiles ... it's a little too price-sensitive for them to come into the market right now and buy," said one copper broker at a New York trading house.
By 10:28 a.m. EDT (1428 GMT), copper for December delivery was down 3.50 cents at $3.3780 a lb. on the New York Mercantile Exchange's COMEX division, near the lower half of its $3.3625 to $3.4325 trading band.
Spot October fell 4.65 cents to its morning low at $3.36.
Trading continued to be on the light side due to this week's London Metal Exchange Dinner Week, with COMEX volume at 10 a.m. estimated at a mere 3,000 lots.
The annual convention is attended by producers, consumers, traders, and analysts, who get together to discuss trends in the market.
China, which accounts for nearly 20 percent of global demand for the red metal, imported 34.5 percent less refined copper in August than in the same month a year ago. For the first eight months of the year, total import volume fell 42.3 percent to 526,846 tonnes, while Chinese output in the same period was up 23 percent at 1.9 million tonnes.
However, with expectations of declining prices in 2007, the price-sensitive Chinese may reenter the market in 2007, after taking a breather this year, analysts said.
Meanwhile, Chinese scrap copper demand promises to increase in the fourth quarter as fabricators favor quality scrap over expensive refined copper, traders said.
In currencies, the dollar charged to a three-month high of $1.2523 per euro on Tuesday on expectations the U.S. economy might be in better shape than previously thought.
London Metal Exchange warehouse stocks rose 325 tonnes to 114,025 tonnes on Tuesday, while COMEX stocks fell 394 short tons to 21,198 tons on Monday.
On the fundamental front, workers at Chile's Andina copper division, owned by mining giant Codelco, agreed to a new three-year contract that includes a 3 percent wage increase and two bonus payments worth about $12,000.
LME three-months copper traded at $7,420 a tonne, down $30 from Monday's kerb close.
"Chinese demand this year has not been what it was the last couple of years. The Chinese would rather tap into domestic stockpiles ... it's a little too price-sensitive for them to come into the market right now and buy," said one copper broker at a New York trading house.
By 10:28 a.m. EDT (1428 GMT), copper for December delivery
Spot October
Trading continued to be on the light side due to this week's London Metal Exchange Dinner Week, with COMEX volume at 10 a.m. estimated at a mere 3,000 lots.
The annual convention is attended by producers, consumers, traders, and analysts, who get together to discuss trends in the market.
China, which accounts for nearly 20 percent of global demand for the red metal, imported 34.5 percent less refined copper in August than in the same month a year ago. For the first eight months of the year, total import volume fell 42.3 percent to 526,846 tonnes, while Chinese output in the same period was up 23 percent at 1.9 million tonnes.
However, with expectations of declining prices in 2007, the price-sensitive Chinese may reenter the market in 2007, after taking a breather this year, analysts said.
Meanwhile, Chinese scrap copper demand promises to increase in the fourth quarter as fabricators favor quality scrap over expensive refined copper, traders said.
In currencies, the dollar charged to a three-month high of $1.2523 per euro on Tuesday on expectations the U.S. economy might be in better shape than previously thought.
London Metal Exchange warehouse stocks rose 325 tonnes to 114,025 tonnes on Tuesday, while COMEX stocks fell 394 short tons to 21,198 tons on Monday.
On the fundamental front, workers at Chile's Andina copper division, owned by mining giant Codelco, agreed to a new three-year contract that includes a 3 percent wage increase and two bonus payments worth about $12,000.
LME three-months copper
Monday, October 09, 2006
Copper futures in New York climbed to a one-week high at the open on Monday, buoyed by firmer overseas prices and another draw-down in inventory levels, sources said.
"London is up about $100 (a tonne), so we are probably getting a little support from that. But, other than that, it is really quiet. There is nothing behind this move ... we're stalling at the high at $3.45," said one floor dealer.
Copper for December delivery rose 5.05 cents, or 1.5 percent, at $3.4390 a lb. on the New York Mercantile Exchange's COMEX division by 10:24 a.m. EDT (1424 GMT). Trading ranged from $3.3875 to $3.45, its best level since Oct. 2.
Spot October gained 4.65 cents to $3.43, just off its morning peak at $3.44.
Volume at 10 a.m. was estimated at 3,000 lots.
Analysts predicted thin, choppy price action in the copper market this week due to the London Metal Exchange Week and Monday's Columbus Day holiday in the United States.
During LME Week, metal producers, consumers, traders, and analysts attend a series of meeting, seminars, and parties to discuss different topics in the market.
"A U.S. holiday today, coupled with LME Week this week, saw players cover short positions as continued falls in stocks and tight supply were seen as price supportive in the short-term," said John Reade, metals analyst with investment bank UBS.
London Metal Exchange warehouse stocks fell by 350 tonnes on Monday to 113,700 tonnes -- less than three days worth of global usage. COMEX stocks increased 216 short tons to 21,592 tons on Friday.
In industry news, workers at Chile's Andina copper division, owned by mining giant Codelco, agreed to a new three-year contract that includes a 3 percent wage increase and two bonus payments worth about $12,000.
Strong domestic demand has powered a recovery of Italy's copper and alloy products sector this year,, despite high and volatile metals prices, but its future depends on competing with China, industry leaders said.
Meanwhile, with analysts seeing world prices of base metals trading lower next year, price-sensitive Chinese copper users may develop a strong appetite in 2007, after taking a breather this year.
The latest weekly Commitments of Traders data issued by the Commodity Futures Trading Commission showed the net noncommercial short position in COMEX copper futures grew to 12,293 lots in the week ended Oct. 3, from 9,601 lots the previous week.
Open interest increased to 69,400 lots for the week, against 67,977 lots in the prior week.
LME three-months copper traded at $7,540 a tonne, up $80 from Friday's kerb close.
"London is up about $100 (a tonne), so we are probably getting a little support from that. But, other than that, it is really quiet. There is nothing behind this move ... we're stalling at the high at $3.45," said one floor dealer.
Copper for December delivery
Spot October
Volume at 10 a.m. was estimated at 3,000 lots.
Analysts predicted thin, choppy price action in the copper market this week due to the London Metal Exchange Week and Monday's Columbus Day holiday in the United States.
During LME Week, metal producers, consumers, traders, and analysts attend a series of meeting, seminars, and parties to discuss different topics in the market.
"A U.S. holiday today, coupled with LME Week this week, saw players cover short positions as continued falls in stocks and tight supply were seen as price supportive in the short-term," said John Reade, metals analyst with investment bank UBS.
London Metal Exchange warehouse stocks fell by 350 tonnes on Monday to 113,700 tonnes -- less than three days worth of global usage. COMEX stocks increased 216 short tons to 21,592 tons on Friday.
In industry news, workers at Chile's Andina copper division, owned by mining giant Codelco, agreed to a new three-year contract that includes a 3 percent wage increase and two bonus payments worth about $12,000.
Strong domestic demand has powered a recovery of Italy's copper and alloy products sector this year,, despite high and volatile metals prices, but its future depends on competing with China, industry leaders said.
Meanwhile, with analysts seeing world prices of base metals trading lower next year, price-sensitive Chinese copper users may develop a strong appetite in 2007, after taking a breather this year.
The latest weekly Commitments of Traders data issued by the Commodity Futures Trading Commission showed the net noncommercial short position in COMEX copper futures grew to 12,293 lots in the week ended Oct. 3, from 9,601 lots the previous week.
Open interest increased to 69,400 lots for the week, against 67,977 lots in the prior week.
LME three-months copper
Friday, October 06, 2006
Copper fell in London on speculation that a job report may indicate a slowdown in economic growth in the U.S., the world's second-largest user of the metal.
Employers probably added 120,000 workers to payrolls last month, the fewest in four months, according to the median estimate of 73 economists surveyed by Bloomberg News. Copper, used in wiring and plumbing, has dropped 3.7 percent this week as declines in oil prices spurred selling by index-linked funds that track both commodities.
``Positive market fundamentals in copper have been arrested because of concern about the U.S. economy and oil prices,'' said Alex Heath, director of base metals trading in London at RBC Capital Markets, which trades on the London Metal Exchange. ``Our overall view here is that the U.S. economy is undoubtedly slowing.''
Copper for delivery in three months on the LME fell $32, or 0.4 percent, to $7,267 a metric ton as of 9:28 a.m. local time, heading for its first weekly drop in three. The metal is down 18 percent from the record $8,800 a ton traded on May 11.
The jobs report for the U.S. Labor Department is set for release at 1:30 p.m. London time.
Six of 12 analysts, investors and traders surveyed by Bloomberg yesterday forecast copper will drop next week. Four expected a gain and two predicted little change. Next week is London Metal Exchange Week, when there tends to be ``some fairly big moves'' in metals prices, Kevin Norrish, Barclays Capital's director of commodities research in London, said yesterday.
China in the world's largest user of copper.
Most other metals on the LME also dropped. Aluminum declined $6.50, or 0.3 percent, to $2,535 a ton. Nickel slipped $100 to $28,800, zinc fell $18 to $3,422 and lead was $15 lower at $1,380. Tin rose $50 to $9,100.
Employers probably added 120,000 workers to payrolls last month, the fewest in four months, according to the median estimate of 73 economists surveyed by Bloomberg News. Copper, used in wiring and plumbing, has dropped 3.7 percent this week as declines in oil prices spurred selling by index-linked funds that track both commodities.
``Positive market fundamentals in copper have been arrested because of concern about the U.S. economy and oil prices,'' said Alex Heath, director of base metals trading in London at RBC Capital Markets, which trades on the London Metal Exchange. ``Our overall view here is that the U.S. economy is undoubtedly slowing.''
Copper for delivery in three months on the LME fell $32, or 0.4 percent, to $7,267 a metric ton as of 9:28 a.m. local time, heading for its first weekly drop in three. The metal is down 18 percent from the record $8,800 a ton traded on May 11.
The jobs report for the U.S. Labor Department is set for release at 1:30 p.m. London time.
Six of 12 analysts, investors and traders surveyed by Bloomberg yesterday forecast copper will drop next week. Four expected a gain and two predicted little change. Next week is London Metal Exchange Week, when there tends to be ``some fairly big moves'' in metals prices, Kevin Norrish, Barclays Capital's director of commodities research in London, said yesterday.
China in the world's largest user of copper.
Most other metals on the LME also dropped. Aluminum declined $6.50, or 0.3 percent, to $2,535 a ton. Nickel slipped $100 to $28,800, zinc fell $18 to $3,422 and lead was $15 lower at $1,380. Tin rose $50 to $9,100.
Thursday, October 05, 2006
Copper rose by more than $100 a tonne, or 1.5 percent, on Thursday after sharp losses earlier in the week left the metal looking cheap in the face of a declining supply surplus.
Copper for delivery in three months on the London Metal Exchange cost $7,140 a tonne by 0551 GMT versus $7,030 at the last London close, when the contract lost $310, or 4.2 percent of its value.
"Copper looks cheap near $7,000," a trader said.
Commodity-specific investment funds in the first half of the year bought up copper on forecasts of strong demand and limited supply, driving prices as high as $8,800 a tonne by May -- double the price in early January -- only to stage steady exits from the market in favour of profits over the last several months.
Copper prices have been in near-steady decline since July.
"The professional money appears to be switching out of copper into aluminium," BNP Paribas commodities analyst David Thurtell said in a report.
Traders said below around $7,200 a tonne copper could attract wide buying interest, particularly given dwindling supplies of the metal.
The latest inventory data shows LME warehouse stocks -- regarded as a supply source of last resort -- totalling only 116,975 tonnes, which is less than three days worth of global usage.
"From a support standpoint, $7,170 is an important level," a trader said.
However, trading was light across Asia due to a week-long holiday in China that has idled the Shanghai Futures Exchange.
Copper for December delivery on the New York Mercantile Exchange's COMEX division was up 3.45 cents at $3.2400 a lb.
U.S. crude oil futures traded higher after heavy losses earlier in the week, underpinning positive sentiment across commodities markets, traders said.
A modest $3 per ounce rise in spot gold prices also added to bullishness among investors in base metals.
Firmer metals prices also underpinned a rise in the heavily mining-weighted Australian Stock Exchange.
Australia's benchmark S&P/ASX 200 Index gained about 1.3 percent.
The world's top miner BHP Billiton rose 1 percent, while the second biggest, Rio Tinto Ltd., was up 1.9 percent.
Three-month aluminium was up $17 at $2,492 a tonne.
Dealers said the metal, widely used in construction and aerospace, was finding some support on modest declines in inventories held in LME warehouses, which were 13 percent below the 52-week high of 793,625 tonnes.
Three-month zinc was $20 higher at $3,325 a tonne.
Copper for delivery in three months on the London Metal Exchange cost $7,140 a tonne by 0551 GMT versus $7,030 at the last London close, when the contract lost $310, or 4.2 percent of its value.
"Copper looks cheap near $7,000," a trader said.
Commodity-specific investment funds in the first half of the year bought up copper on forecasts of strong demand and limited supply, driving prices as high as $8,800 a tonne by May -- double the price in early January -- only to stage steady exits from the market in favour of profits over the last several months.
Copper prices have been in near-steady decline since July.
"The professional money appears to be switching out of copper into aluminium," BNP Paribas commodities analyst David Thurtell said in a report.
Traders said below around $7,200 a tonne copper could attract wide buying interest, particularly given dwindling supplies of the metal.
The latest inventory data shows LME warehouse stocks -- regarded as a supply source of last resort -- totalling only 116,975 tonnes, which is less than three days worth of global usage.
"From a support standpoint, $7,170 is an important level," a trader said.
However, trading was light across Asia due to a week-long holiday in China that has idled the Shanghai Futures Exchange.
Copper for December delivery on the New York Mercantile Exchange's COMEX division was up 3.45 cents at $3.2400 a lb.
U.S. crude oil futures traded higher after heavy losses earlier in the week, underpinning positive sentiment across commodities markets, traders said.
A modest $3 per ounce rise in spot gold prices also added to bullishness among investors in base metals.
Firmer metals prices also underpinned a rise in the heavily mining-weighted Australian Stock Exchange.
Australia's benchmark S&P/ASX 200 Index gained about 1.3 percent.
The world's top miner BHP Billiton rose 1 percent, while the second biggest, Rio Tinto Ltd., was up 1.9 percent.
Three-month aluminium was up $17 at $2,492 a tonne.
Dealers said the metal, widely used in construction and aerospace, was finding some support on modest declines in inventories held in LME warehouses, which were 13 percent below the 52-week high of 793,625 tonnes.
Three-month zinc was $20 higher at $3,325 a tonne.
Wednesday, October 04, 2006
Copper tumbled more than 4 per cent in London on Tuesday night amid concerns about oversupply and a slowdown in manufacturing, while oil traded at a seven-month low of $US58.27 a barrel.
The plunge in commodities reverberated through the Australian market yesterday, sending the S&P/ASX 300 Metals & Mining Index almost 4 per cent lower to 3203.1 points.
BHP shares plunged almost 5 per cent, losing $1.19 to $24.76, while Rio Tinto shed $1.99 to $68.01.
Copper for January delivery traded as low as $US7215 a tonne yesterday, from a close of $US7371 a tonne in London.
The price of copper, which is used in everything from electrical leads to motors, has fallen almost 20 per cent from its peak of $US8800 in May.
Perform A Background Check On Anyone, Anywhere
Analysts blamed the sharp fall this week on disappointing manufacturing figures in the United States and new forecasts by the International Copper Study Group (ICSG).
The ISM manufacturing index, which measures the health of the US manufacturing industry, fell to its lowest level in 18 months in September.
Chip Hanlon, president of Delta Global Advisors in California, said: "The soft economic data raises new fears that we are moving toward an economic recession and diminished demand for commodities."
Also weighing on the copper price was a report by the ICSG, which forecast a "modest surplus" of copper this year and a 1.8 per cent decline in China's copper consumption.
Base metals, including copper, were BHP's biggest earner in 2005-06, contributing $US5.4 billion to earnings before interest and tax.
Rio relies even more heavily on copper production, with the metal responsible for almost half of the company's earnings in the six months to June 30.
The plunge in commodities reverberated through the Australian market yesterday, sending the S&P/ASX 300 Metals & Mining Index almost 4 per cent lower to 3203.1 points.
BHP shares plunged almost 5 per cent, losing $1.19 to $24.76, while Rio Tinto shed $1.99 to $68.01.
Copper for January delivery traded as low as $US7215 a tonne yesterday, from a close of $US7371 a tonne in London.
The price of copper, which is used in everything from electrical leads to motors, has fallen almost 20 per cent from its peak of $US8800 in May.
Perform A Background Check On Anyone, Anywhere
Analysts blamed the sharp fall this week on disappointing manufacturing figures in the United States and new forecasts by the International Copper Study Group (ICSG).
The ISM manufacturing index, which measures the health of the US manufacturing industry, fell to its lowest level in 18 months in September.
Chip Hanlon, president of Delta Global Advisors in California, said: "The soft economic data raises new fears that we are moving toward an economic recession and diminished demand for commodities."
Also weighing on the copper price was a report by the ICSG, which forecast a "modest surplus" of copper this year and a 1.8 per cent decline in China's copper consumption.
Base metals, including copper, were BHP's biggest earner in 2005-06, contributing $US5.4 billion to earnings before interest and tax.
Rio relies even more heavily on copper production, with the metal responsible for almost half of the company's earnings in the six months to June 30.
Tuesday, October 03, 2006
Copper prices tumbled the most in three weeks on speculation a slowdown in the U.S. economy, the world's largest, may reduce demand for commodities, including metals.
The Reuters/Jefferies CRB Index dropped 12 percent in the third quarter, the most since at least 1956. Copper in New York is down 18 percent from a record $4.04 a pound a metric ton in mid- May. U.S. manufacturing expanded less than analysts estimated in August and spending on home construction dropped for a fifth straight month, reports showed yesterday.
``The concern on the U.S. economy is far from over,'' said Roy Carson, a London-based analyst at Triland Metals Ltd. Triland is one of 11 companies that trade on the floor of the London Metal Exchange.
Copper futures for December delivery fell 11.45 cents, or 3.3 percent, to $3.315 a pound at 9:27 a.m. on the Comex division of the New York Mercantile Exchange. A close at that price would mark the biggest percentage drop since Sept. 11.
Before today, prices were up 68 percent this year. A futures contract is an obligation to buy or sell a commodity at a fixed price for a specific delivery date.
Copper for delivery in three months dropped $250, or 3.3 percent, to $7,270 a metric ton on the LME. Before today, prices had almost doubled from a year ago.
The Institute for Supply Management's manufacturing index fell to 52.9. The gauge was expected to fall to 53.5 from 54.5 the prior month, based on the median of 64 forecasts in a Bloomberg News survey. Private residential construction spending dropped 1.5 percent, the Commerce Department said yesterday.
Xstrata Outlook
Industrial metals have dropped in the past four months after interest-rate increases worldwide spurred speculation that investment and consumer demand for the metals may dwindle.
The outlook for metals, including copper and nickel, is ``very strong'' in the next six months because miners are not producing enough to meet demand, Xstrata Plc Chief Executive Officer Mick Davis said today in an interview in London.
``I would be somewhat surprised if we ended up with a surplus next year'' of copper and nickel, Davis said.
Copper supplies from mines and scrap yards will outpace demand in 2007 by 176,000 metric tons, down from a surplus of 239,000 tons this year, the Lisbon-based International Copper Study Group said yesterday in a report.
Lead prices gained after inventories declined the most in 16 months. Stockpiles monitored by the LME fell 2,625 tons, or 4.4 percent, to 57,425 tons today.
Lead climbed $14, or 1 percent, to $1,390 a ton in London.
The Reuters/Jefferies CRB Index dropped 12 percent in the third quarter, the most since at least 1956. Copper in New York is down 18 percent from a record $4.04 a pound a metric ton in mid- May. U.S. manufacturing expanded less than analysts estimated in August and spending on home construction dropped for a fifth straight month, reports showed yesterday.
``The concern on the U.S. economy is far from over,'' said Roy Carson, a London-based analyst at Triland Metals Ltd. Triland is one of 11 companies that trade on the floor of the London Metal Exchange.
Copper futures for December delivery fell 11.45 cents, or 3.3 percent, to $3.315 a pound at 9:27 a.m. on the Comex division of the New York Mercantile Exchange. A close at that price would mark the biggest percentage drop since Sept. 11.
Before today, prices were up 68 percent this year. A futures contract is an obligation to buy or sell a commodity at a fixed price for a specific delivery date.
Copper for delivery in three months dropped $250, or 3.3 percent, to $7,270 a metric ton on the LME. Before today, prices had almost doubled from a year ago.
The Institute for Supply Management's manufacturing index fell to 52.9. The gauge was expected to fall to 53.5 from 54.5 the prior month, based on the median of 64 forecasts in a Bloomberg News survey. Private residential construction spending dropped 1.5 percent, the Commerce Department said yesterday.
Xstrata Outlook
Industrial metals have dropped in the past four months after interest-rate increases worldwide spurred speculation that investment and consumer demand for the metals may dwindle.
The outlook for metals, including copper and nickel, is ``very strong'' in the next six months because miners are not producing enough to meet demand, Xstrata Plc Chief Executive Officer Mick Davis said today in an interview in London.
``I would be somewhat surprised if we ended up with a surplus next year'' of copper and nickel, Davis said.
Copper supplies from mines and scrap yards will outpace demand in 2007 by 176,000 metric tons, down from a surplus of 239,000 tons this year, the Lisbon-based International Copper Study Group said yesterday in a report.
Lead prices gained after inventories declined the most in 16 months. Stockpiles monitored by the LME fell 2,625 tons, or 4.4 percent, to 57,425 tons today.
Lead climbed $14, or 1 percent, to $1,390 a ton in London.
Monday, October 02, 2006
Copper prices rose, extending Friday's gains, as the red metal found support from steadier oil and gold markets, declining stocks and concerns over possible supply disruptions ahead.
At 2.32 pm, LME copper for 3-month delivery was up at 7,635.00 usd against 7,545.00 usd at the close Friday. Other metals were also higher.
Aluminium rose to 2,596.50 usd against 2,584.00 usd, lead was up at 1,395.00 usd against 1,380.00 usd, zinc rose to 3,400.00 usd from 3,330.00 usd, tin went up to 8,925.00 usd from 8,850.00 usd and nickel was up at 29,600.00 usd against 29,350.00 usd.
'Copper has opened higher this morning, as has the rest of the group, brushing off news out over the weekend that Highland Valley has reached a tentative labour agreement with its unions,' said Man Financial analyst Ed Meir.
The Highland Valley copper mine in Canada is owned by Teck Cominco Ltd. Concerns about possible strike action at the mine helped copper post gains on Friday.
It has continued higher today, underpinned by news of further declines in stockpile levels. The LME said today that copper stocks in its warehouses fell 700 tonnes to 116,875 - equivalent to less than 3 days of global consumption.
Furthermore, steadier oil and gold prices are lending support. Oil prices have begun steadying from a month-long slump, as traders weigh swelling energy stocks against the threat of output cuts by the OPEC cartel.
The firmer tone in oil is supporting the metals across the board, said Meir.
Specifically on copper, he said the metal continues to draw support from news that two unions at Codelco's Andina copper mine are to negotiate separate contracts with management, increasing the odds of drawn out negotiations.
'We see copper as having trouble passing the 7,770 usd (level) in the short term (the next two days), but the odds of a successful pass
above this level are increasing as we enter the fourth quarter.
-- a time when participants could get increasingly nervous about possible labour trouble at Codelco,' said Meir.
At 2.32 pm, LME copper for 3-month delivery was up at 7,635.00 usd against 7,545.00 usd at the close Friday. Other metals were also higher.
Aluminium rose to 2,596.50 usd against 2,584.00 usd, lead was up at 1,395.00 usd against 1,380.00 usd, zinc rose to 3,400.00 usd from 3,330.00 usd, tin went up to 8,925.00 usd from 8,850.00 usd and nickel was up at 29,600.00 usd against 29,350.00 usd.
'Copper has opened higher this morning, as has the rest of the group, brushing off news out over the weekend that Highland Valley has reached a tentative labour agreement with its unions,' said Man Financial analyst Ed Meir.
The Highland Valley copper mine in Canada is owned by Teck Cominco Ltd. Concerns about possible strike action at the mine helped copper post gains on Friday.
It has continued higher today, underpinned by news of further declines in stockpile levels. The LME said today that copper stocks in its warehouses fell 700 tonnes to 116,875 - equivalent to less than 3 days of global consumption.
Furthermore, steadier oil and gold prices are lending support. Oil prices have begun steadying from a month-long slump, as traders weigh swelling energy stocks against the threat of output cuts by the OPEC cartel.
The firmer tone in oil is supporting the metals across the board, said Meir.
Specifically on copper, he said the metal continues to draw support from news that two unions at Codelco's Andina copper mine are to negotiate separate contracts with management, increasing the odds of drawn out negotiations.
'We see copper as having trouble passing the 7,770 usd (level) in the short term (the next two days), but the odds of a successful pass
above this level are increasing as we enter the fourth quarter.
-- a time when participants could get increasingly nervous about possible labour trouble at Codelco,' said Meir.
Friday, September 29, 2006
Copper headed for a ninth straight quarterly gain in London on speculation that workers at the Highland Valley mine in Canada may strike, reducing supply of the metal used in pipes and wires.
Workers voted to strike Oct. 1 if they fail to reach an agreement with the mine's owner Teck Cominco Ltd., United Steelworkers official Richard Boyce said yesterday. Copper has soared to a record this year as disruption at mines in Asia and South America reduced output.
``There's a large potential for problems out there and people are not comfortable,'' said Kevin Tuohy, a trader at Man Financial Ltd., one of 11 companies dealing on the floor of the London Metal Exchange.
Copper for delivery in three months on the LME rose $65, or 0.9 percent, to $7,535 a metric ton as of 10:52 a.m. local time. It has gained 2.9 percent this quarter. The metal traded at $8,800 on May 11.
Highland Valley, located in British Columbia, produced 179,000 metric tons of copper in 2005, about 1.2 percent of the 14.9 million tons the Lisbon-based International Copper Study Group estimates companies mined around the world last year.
A production shortfall has forced consumers to tap stockpiles. Copper inventory monitored by the LME fell 3,800 tons, or 3.1 percent, to 117,575 tons, the exchange said today in a daily report. That's the biggest drop since June 13. LME stockpiles are equal to less than three days of global consumption.
Copper needs to close above $7,600 a ton to spur buying from investors tracking technical charts, Tuohy said. Five of 11 analysts, investors, traders and consumers surveyed yesterday and Sept. 26 by Bloomberg News said copper will fall next week. Four said it will rise and two forecast little change.
Aluminum lost $25 to $2,580 a ton and nickel dropped $225 to $28,775. Lead gained $7 to $1,395 and tin slid $50 at $9,000. Zinc dropped $15 to $3,340 a ton.
Workers voted to strike Oct. 1 if they fail to reach an agreement with the mine's owner Teck Cominco Ltd., United Steelworkers official Richard Boyce said yesterday. Copper has soared to a record this year as disruption at mines in Asia and South America reduced output.
``There's a large potential for problems out there and people are not comfortable,'' said Kevin Tuohy, a trader at Man Financial Ltd., one of 11 companies dealing on the floor of the London Metal Exchange.
Copper for delivery in three months on the LME rose $65, or 0.9 percent, to $7,535 a metric ton as of 10:52 a.m. local time. It has gained 2.9 percent this quarter. The metal traded at $8,800 on May 11.
Highland Valley, located in British Columbia, produced 179,000 metric tons of copper in 2005, about 1.2 percent of the 14.9 million tons the Lisbon-based International Copper Study Group estimates companies mined around the world last year.
A production shortfall has forced consumers to tap stockpiles. Copper inventory monitored by the LME fell 3,800 tons, or 3.1 percent, to 117,575 tons, the exchange said today in a daily report. That's the biggest drop since June 13. LME stockpiles are equal to less than three days of global consumption.
Copper needs to close above $7,600 a ton to spur buying from investors tracking technical charts, Tuohy said. Five of 11 analysts, investors, traders and consumers surveyed yesterday and Sept. 26 by Bloomberg News said copper will fall next week. Four said it will rise and two forecast little change.
Aluminum lost $25 to $2,580 a ton and nickel dropped $225 to $28,775. Lead gained $7 to $1,395 and tin slid $50 at $9,000. Zinc dropped $15 to $3,340 a ton.
Thursday, September 28, 2006
Copper gained in London on speculation that a labor dispute at Teck Cominco Ltd.'s Highland Valley mine may result in a work stoppage, reducing supply of the metal used in pipes and wires.
Workers at the mine, Canada's largest producing deposit of copper, will strike on Oct. 1, unless a new labor agreement can be reached before then, Richard Boyce, president of union local 7619 of the United Steel Workers of America, said yesterday in a statement. Prices of copper have soared 75 percent this year, partly because of disruptions at mine in Chile and Mexico.
Perform Background Checks On Anyone.......Even Corporate Executives!
``Copper is in a very, very short supply,'' David Thurtell, a London-based analyst at BNP Paribas, said today by telephone. BNP Paribas is a member of the London Metal Exchange.
Copper for delivery in three months gained $89, or 1.2 percent, to $7,699 a metric ton at 10:02 a.m. on the London Metal Exchange. Earlier, it rose as much as $120, or 1.6 percent, to $7,770 a ton.
Highland Valley produced 179,000 metric tons (394.6 million pounds) of copper in 2005. That's about 1.23 percent of the 14.9 million tons of the metal the London-based International Copper Study Group estimates companies mined around the world last year.
Strikes at Chile's Escondida, the world's largest copper mine Chile, and at Grupo Mexico SA cut production earlier this year.
Copper Inventory
Demand for copper will exceed mine output by 52,000 metric tons through 2006, after a deficit of 360,000 tons last year, Goldman Sachs Group Inc. forecast on Sept. 18.
Inventory of copper monitored by the LME dropped 1,050 tons, or 0.9 percent, to 121,375 tons, according to the exchange's daily report. That's equivalent to less than three days of global consumption.
Codelco, the world's largest copper producer, plans to raise charges paid by metal buyers in Europe to a record, boosting costs for producers of wires and pipes, according to two people with knowledge of the industry.
European consumers will pay between $120 and $125 a metric ton above cash prices on the London Metal Exchange next year, up from a $105 a ton premium now, according to the people, who asked not to be identified because customers have yet to be told. The extra charge includes freight and insurance.
Nickel inventory tracked by the exchange gained most in three weeks. Stockpiles jumped 390 metric tons, or 7.5 percent, to 5,562 tons, the LME said today in a daily report. That's the largest daily gain since Sept. 6.
Nickel for delivery in three months rose $200, or 0.7 percent, to $28,600 a ton.
Aluminum gained $35 to $2,567 a ton, lead rose $8 to $1,397, and zinc added $55 to $3,455 a ton. Tin was unchanged at $9,050 a ton.
Workers at the mine, Canada's largest producing deposit of copper, will strike on Oct. 1, unless a new labor agreement can be reached before then, Richard Boyce, president of union local 7619 of the United Steel Workers of America, said yesterday in a statement. Prices of copper have soared 75 percent this year, partly because of disruptions at mine in Chile and Mexico.
Perform Background Checks On Anyone.......Even Corporate Executives!
``Copper is in a very, very short supply,'' David Thurtell, a London-based analyst at BNP Paribas, said today by telephone. BNP Paribas is a member of the London Metal Exchange.
Copper for delivery in three months gained $89, or 1.2 percent, to $7,699 a metric ton at 10:02 a.m. on the London Metal Exchange. Earlier, it rose as much as $120, or 1.6 percent, to $7,770 a ton.
Highland Valley produced 179,000 metric tons (394.6 million pounds) of copper in 2005. That's about 1.23 percent of the 14.9 million tons of the metal the London-based International Copper Study Group estimates companies mined around the world last year.
Strikes at Chile's Escondida, the world's largest copper mine Chile, and at Grupo Mexico SA cut production earlier this year.
Copper Inventory
Demand for copper will exceed mine output by 52,000 metric tons through 2006, after a deficit of 360,000 tons last year, Goldman Sachs Group Inc. forecast on Sept. 18.
Inventory of copper monitored by the LME dropped 1,050 tons, or 0.9 percent, to 121,375 tons, according to the exchange's daily report. That's equivalent to less than three days of global consumption.
Codelco, the world's largest copper producer, plans to raise charges paid by metal buyers in Europe to a record, boosting costs for producers of wires and pipes, according to two people with knowledge of the industry.
European consumers will pay between $120 and $125 a metric ton above cash prices on the London Metal Exchange next year, up from a $105 a ton premium now, according to the people, who asked not to be identified because customers have yet to be told. The extra charge includes freight and insurance.
Nickel inventory tracked by the exchange gained most in three weeks. Stockpiles jumped 390 metric tons, or 7.5 percent, to 5,562 tons, the LME said today in a daily report. That's the largest daily gain since Sept. 6.
Nickel for delivery in three months rose $200, or 0.7 percent, to $28,600 a ton.
Aluminum gained $35 to $2,567 a ton, lead rose $8 to $1,397, and zinc added $55 to $3,455 a ton. Tin was unchanged at $9,050 a ton.
Wednesday, September 27, 2006
Copper futures in New York climbed at the open on Wednesday, extending their weekly gains, with surprisingly strong U.S. new home sales data and a possible strike threat at the Highland Valley copper mine adding to the bullishness, sources said.
"The housing market is looking good. With the inventory that is out there and the cuts in home prices, I think you're probably going to see home sales start to increase, which should benefit the copper, as it would likely increase demand," said one broker at a New York trading house.
By 10:54 a.m. EDT (1454 GMT), copper for December delivery was up 1.70 cents, or about a half of a percent, at $3.4830 a lb on the New York Mercantile Exchange's COMEX division, ranging from an overnight low at $3.4570 to its early peak at $3.54.
"We gapped a little higher at the open, up to $3.51 and covered the gap already down to $3.49, so it looks like the $3.49 level is today's support," said one COMEX floor dealer.
Technicians pegged resistance in the benchmark December contract at around the $3.65 level, followed by $3.72.
Spot September rose 1.65 cents at $3.48.
COMEX copper volume at 10:00 a.m. was estimated at 4,000 lots.
Sales of new U.S. homes unexpectedly rose in August to a seasonally adjusted 1.050 million annualized rate after a sharp downward revision in July.
New single-family homes sales increased 4.1 percent in August from a downwardly revised July rate of 1.009 million, which was originally reported as 1.072 million. The revised July rate was the lowest since a March 2003 rate of 999,000, the Commerce Department said.
Meanwhile, Teck Cominco Ltd. said on Wednesday that the United Steel Workers union at its Highland Valley Copper operation in British Columbia has served a strike notice to the company.
Local 7619 of the union will be in a position to strike on October 1, when its current agreement with Teck Cominco expires. Mediation between the two sides has been suspended and is not expected to resume until September 30, the company said.
Highland Valley is the largest copper mine in Canada, producing 179,000 tonnes of the metal last year along with some molybdenum.
Separately, China's refined copper consumption is likely to rise by 5.6 percent this year and 5.3 percent next year, compared with 9 percent in 2005, as substitutes eat into demand, a senior analyst said on Wednesday.
"Yes, the copper market was weaker, but it was never done. The fact is that inventories are still low and if there is just a little bit of Chinese buying that comes back into the market, which it has, I think this market is ready to test the highs again," said one analyst.
London Metal Exchange-monitored warehouse stocks grew 475 tonnes to 122,425 tonnes on Wednesday, while COMEX stocks rose 348 short tons to 21,326 tons on Tuesday.
LME three-months copper last traded up $20 at $7,670 a tonne against Tuesday's kerb close.
"The housing market is looking good. With the inventory that is out there and the cuts in home prices, I think you're probably going to see home sales start to increase, which should benefit the copper, as it would likely increase demand," said one broker at a New York trading house.
By 10:54 a.m. EDT (1454 GMT), copper for December delivery
"We gapped a little higher at the open, up to $3.51 and covered the gap already down to $3.49, so it looks like the $3.49 level is today's support," said one COMEX floor dealer.
Technicians pegged resistance in the benchmark December contract at around the $3.65 level, followed by $3.72.
Spot September
COMEX copper volume at 10:00 a.m. was estimated at 4,000 lots.
Sales of new U.S. homes unexpectedly rose in August to a seasonally adjusted 1.050 million annualized rate after a sharp downward revision in July.
New single-family homes sales increased 4.1 percent in August from a downwardly revised July rate of 1.009 million, which was originally reported as 1.072 million. The revised July rate was the lowest since a March 2003 rate of 999,000, the Commerce Department said.
Meanwhile, Teck Cominco Ltd. said on Wednesday that the United Steel Workers union at its Highland Valley Copper operation in British Columbia has served a strike notice to the company.
Local 7619 of the union will be in a position to strike on October 1, when its current agreement with Teck Cominco expires. Mediation between the two sides has been suspended and is not expected to resume until September 30, the company said.
Highland Valley is the largest copper mine in Canada, producing 179,000 tonnes of the metal last year along with some molybdenum.
Separately, China's refined copper consumption is likely to rise by 5.6 percent this year and 5.3 percent next year, compared with 9 percent in 2005, as substitutes eat into demand, a senior analyst said on Wednesday.
"Yes, the copper market was weaker, but it was never done. The fact is that inventories are still low and if there is just a little bit of Chinese buying that comes back into the market, which it has, I think this market is ready to test the highs again," said one analyst.
London Metal Exchange-monitored warehouse stocks grew 475 tonnes to 122,425 tonnes on Wednesday, while COMEX stocks rose 348 short tons to 21,326 tons on Tuesday.
LME three-months copper last traded up $20 at $7,670 a tonne against Tuesday's kerb close.
Tuesday, September 26, 2006
Copper rose in London, snapping a two-sessions slide, on speculation that makers of metal wires and pipes, particularly in China, will increase purchases to avoid a supply shortfall this year.
Demand for copper will exceed mine output by 52,000 metric tons through 2006, after a deficit of 360,000 tons last year, Goldman Sachs Group Inc. forecast on Sept. 18. Stockpiles have plunged 86 percent in the past four years, leaving stockpiles monitored by the London Metal Exchange at levels sufficient to meet demand for just three days.
``There is no doubt that consumers are adding support to this market,'' said Peter Hickson, a London-based strategist at UBS Ltd. who has worked more than three decades in the metals and mining industry, including the last 12 as a metals analyst.
Copper for delivery in three months gained $45, or 0.6 percent, to $7,550 a metric ton ($3.425 a pound) at 1:56 p.m. on the London Metal Exchange. Prices have doubled in the past year and reached a record $8,800 on May 11.
China, the world's largest copper-buying nation, probably used about 1 million tons of the metal from their own stockpiles in the past 12 months, which will force the country to boost imports as domestic supply declines, Hickson said.
``The Chinese have got themselves short of copper,'' he said. Copper's 14 percent decline from its record high came from selling by hedge funds, not actual users of the metal, he said.
Inventories
Stockpiles of copper tracked by the LME increased 325 tons to 121,950 tons, the LME said in a daily report today. In China, inventory monitored by the Shanghai Futures Exchange fell to a 19-week low last week, according to the bourse's weekly report.
The metal declined yesterday and Sept. 22 on a speculation that a slowdown in the U.S. housing market may hurt demand for wire and pipe. The U.S. is the world's second-largest consumer of copper after China.
Copper for delivery in December fell 0.35 cent, or 0.1 percent, to $3.444 a pound at 8:56 a.m. on the Comex division of the New York Mercantile Exchange. A futures contract is an obligation to buy or sell a commodity at a fixed price for a specific delivery date.
Nickel stockpiles dropped 312 tons to 5,724 tons, the LME said, equivalent to less than two days of global consumption. Nickel inventory has declined 84 percent this year.
Nickel Prices
Prices of nickel, used as an alloy in stainless steel, gained $300, or 1 percent, to $28,300 a ton. The three-month contract has doubled in the past year as production of stainless steel expanded.
Global stainless output jumped 6.5 percent to 13.9 million tons, the highest ever, in the first half, the Brussels-based International Stainless Steel Forum said today on its Web site. Production from China, the world's largest producer, soared 44 percent to 2.3 million tons, the forum said.
Among other LME-traded metals, aluminum fell $4 at $2,514 a ton and lead advanced $25 to $1,365 a ton. Tin added $75 to $9,050 a ton. Zinc dropped $19 to $3,380 a ton.
Demand for copper will exceed mine output by 52,000 metric tons through 2006, after a deficit of 360,000 tons last year, Goldman Sachs Group Inc. forecast on Sept. 18. Stockpiles have plunged 86 percent in the past four years, leaving stockpiles monitored by the London Metal Exchange at levels sufficient to meet demand for just three days.
``There is no doubt that consumers are adding support to this market,'' said Peter Hickson, a London-based strategist at UBS Ltd. who has worked more than three decades in the metals and mining industry, including the last 12 as a metals analyst.
Copper for delivery in three months gained $45, or 0.6 percent, to $7,550 a metric ton ($3.425 a pound) at 1:56 p.m. on the London Metal Exchange. Prices have doubled in the past year and reached a record $8,800 on May 11.
China, the world's largest copper-buying nation, probably used about 1 million tons of the metal from their own stockpiles in the past 12 months, which will force the country to boost imports as domestic supply declines, Hickson said.
``The Chinese have got themselves short of copper,'' he said. Copper's 14 percent decline from its record high came from selling by hedge funds, not actual users of the metal, he said.
Inventories
Stockpiles of copper tracked by the LME increased 325 tons to 121,950 tons, the LME said in a daily report today. In China, inventory monitored by the Shanghai Futures Exchange fell to a 19-week low last week, according to the bourse's weekly report.
The metal declined yesterday and Sept. 22 on a speculation that a slowdown in the U.S. housing market may hurt demand for wire and pipe. The U.S. is the world's second-largest consumer of copper after China.
Copper for delivery in December fell 0.35 cent, or 0.1 percent, to $3.444 a pound at 8:56 a.m. on the Comex division of the New York Mercantile Exchange. A futures contract is an obligation to buy or sell a commodity at a fixed price for a specific delivery date.
Nickel stockpiles dropped 312 tons to 5,724 tons, the LME said, equivalent to less than two days of global consumption. Nickel inventory has declined 84 percent this year.
Nickel Prices
Prices of nickel, used as an alloy in stainless steel, gained $300, or 1 percent, to $28,300 a ton. The three-month contract has doubled in the past year as production of stainless steel expanded.
Global stainless output jumped 6.5 percent to 13.9 million tons, the highest ever, in the first half, the Brussels-based International Stainless Steel Forum said today on its Web site. Production from China, the world's largest producer, soared 44 percent to 2.3 million tons, the forum said.
Among other LME-traded metals, aluminum fell $4 at $2,514 a ton and lead advanced $25 to $1,365 a ton. Tin added $75 to $9,050 a ton. Zinc dropped $19 to $3,380 a ton.
Monday, September 25, 2006
Copper fell most in two weeks in London and New York on speculation an industry report will add to signs that U.S. economic growth is slowing. Nickel declined after Inco Ltd., the world's second-largest producer, reached an agreement with workers to end a two-month strike.
Sales of previously owned homes dropped in August to the lowest since early 2004, economists expect a report by the U.S. National Association of Realtors to show today. Copper has dropped 16 percent from a record $8,800 in mid-May, partly on evidence of shrinking U.S. demand.
``The market is becoming more concerned about slower economic growth in the U.S., which means slower demand for metals,'' said Michael Widmer, head of metals research at Calyon in London. Calyon is among 11 companies that trade on the floor of the London Metal Exchange.
Copper for delivery in three months fell $155, or 2.1 percent, to $7,390 a metric ton at 1:46 p.m. on the LME. A close at that price would mark the biggest percentage decline since Sept. 11. The metal has quadrupled in the past five years, partly fueled by demand for pipes and wires used in U.S. homes.
Copper for December delivery declined 7.6 cents, or 2.2 percent, to $3.3675 a pound on the Comex division of the New York Mercantile Exchange. Before today, prices had gained 69 percent this year. A futures contract is an obligation to buy or sell a commodity at a fixed price for a specific delivery date.
Sales of previously owned homes in the U.S., the second- biggest copper consumer, fell to an annual rate of 6.2 million last month from 6.33 million in July, according to the median estimate of 51 economists surveyed by Bloomberg News. The realtor group will release data at 10 a.m. Washington time. As much as 400 pounds of copper is used in the average U.S. house.
Copper Stockpiles
Dwindling demand for the metal may increase inventories, Widmer said. Stockpiles monitored by the LME increased 350 tons, or 0.3 percent, to 121,625 tons today. That's still less than three days of global consumption.
BHP Billiton Ltd., the world's largest miner, avoided a strike at its Spence copper mine in Chile. Workers voted to accept a three-year contract that includes a wage increase and a bonus, Andres Ramirez, union president, said yesterday. Workers had planned a strike tomorrow.
Spence is scheduled to start production in the fourth quarter.
Hedge-fund managers and other large speculators increased their net-short position, or bet prices will fall, by 18 percent to 11,042 contracts of Comex copper futures in the week ended Sept. 19, according to the Commodity Futures Trading Commission. Net- short positions rose by 1,648 contracts, or 18 percent, from a week earlier.
Nickel for delivery in three months fell $400, or 1.5 percent, to $27,250 a ton in London.
The 120-member United Steelworkers Local 6480 may ratify an agreement with Inco as early as this week and resume work at Voisey's Bay in Labrador, Canada,, company spokesman Bob Carter said Sept. 23.
Toronto-based Inco suspended production at Voisey's Bay after workers went on strike July 28 following five months of contract negotiations. The mine can produce 110 million pounds of nickel and 70 million pounds of copper a year.
Sales of previously owned homes dropped in August to the lowest since early 2004, economists expect a report by the U.S. National Association of Realtors to show today. Copper has dropped 16 percent from a record $8,800 in mid-May, partly on evidence of shrinking U.S. demand.
``The market is becoming more concerned about slower economic growth in the U.S., which means slower demand for metals,'' said Michael Widmer, head of metals research at Calyon in London. Calyon is among 11 companies that trade on the floor of the London Metal Exchange.
Copper for delivery in three months fell $155, or 2.1 percent, to $7,390 a metric ton at 1:46 p.m. on the LME. A close at that price would mark the biggest percentage decline since Sept. 11. The metal has quadrupled in the past five years, partly fueled by demand for pipes and wires used in U.S. homes.
Copper for December delivery declined 7.6 cents, or 2.2 percent, to $3.3675 a pound on the Comex division of the New York Mercantile Exchange. Before today, prices had gained 69 percent this year. A futures contract is an obligation to buy or sell a commodity at a fixed price for a specific delivery date.
Sales of previously owned homes in the U.S., the second- biggest copper consumer, fell to an annual rate of 6.2 million last month from 6.33 million in July, according to the median estimate of 51 economists surveyed by Bloomberg News. The realtor group will release data at 10 a.m. Washington time. As much as 400 pounds of copper is used in the average U.S. house.
Copper Stockpiles
Dwindling demand for the metal may increase inventories, Widmer said. Stockpiles monitored by the LME increased 350 tons, or 0.3 percent, to 121,625 tons today. That's still less than three days of global consumption.
BHP Billiton Ltd., the world's largest miner, avoided a strike at its Spence copper mine in Chile. Workers voted to accept a three-year contract that includes a wage increase and a bonus, Andres Ramirez, union president, said yesterday. Workers had planned a strike tomorrow.
Spence is scheduled to start production in the fourth quarter.
Hedge-fund managers and other large speculators increased their net-short position, or bet prices will fall, by 18 percent to 11,042 contracts of Comex copper futures in the week ended Sept. 19, according to the Commodity Futures Trading Commission. Net- short positions rose by 1,648 contracts, or 18 percent, from a week earlier.
Nickel for delivery in three months fell $400, or 1.5 percent, to $27,250 a ton in London.
The 120-member United Steelworkers Local 6480 may ratify an agreement with Inco as early as this week and resume work at Voisey's Bay in Labrador, Canada,, company spokesman Bob Carter said Sept. 23.
Toronto-based Inco suspended production at Voisey's Bay after workers went on strike July 28 following five months of contract negotiations. The mine can produce 110 million pounds of nickel and 70 million pounds of copper a year.
Saturday, September 23, 2006
Copper futures in New York ended firmer in modest dealings on Friday as the market extended its reversal from an 8-1/2 week low on Wednesday but still held to its near three-month range, sources said.
"We entered slightly into a gap above $3.4650, but some profit-taking going into the close limited the move. As long as we settle below that level, we're still kind of on the defensive," said Scott Meyers, senior trading analyst with Pioneer Futures.
"There is a gap that needs to be filled up to $3.5350, so we will see how that plays out next week," Meyers added.
Copper for December delivery ended up 1.20 cents at at $3.4435 a lb on the New York Mercantile Exchange's COMEX division after dealing between $3.39 and $3.4950.
Spot September gained 1.75 cents to finish out at $3.4395, while back month contracts posted gains of 0.15 to 1.15 cents.
COMEX final copper volume was estimated at 10,000 lots against Thursday's official count at 15,035 lots.
"The open interest in the market is very low, so that tells you that there does not seem to be a lot of big-time shorts in there, so that's probably why we're holding up the way we are," said one broker at a New York trading house.
As of Sept. 21, open interest in the COMEX copper market grew 424 lots to 68,516 lots.
Despite copper's technical rebound this week, analysts were quick to point out that prices were still trading within a wide band with concerns over U.S. economic growth weighing on the upside, while low stock levels in exchange-registered warehouses were seen limiting the declines.
Drawdowns in exchange-registered warehouses underpinned the early buying on Friday after inventory data out of London showed a 2,050-tonne decline, leaving total stocks at 121,275 tonnes -- less than three days worth of global consumption.
Copper inventories in warehouses monitored by the Shanghai Futures Exchange fell to 43,019 tonnes in the week ended Thursday, from 44,944 tonnes the week prior.
Chinese copper prices were expected to rise as Beijing's ban on duty-free imports of refined copper for some copper products would raise prices for imported metal, traders said on Thursday.
Upcoming labor contract renewals at major miners could disrupt supplies if talks between the two sides break down.
"Low stocks and the potential for supply disruptions is still seen supporting sentiment with consumer/investor buying being noted into price dips," said Robin Bhar, metals analyst with investment bank UBS.
The dollar weakened against the euro on Friday after economic data this week pointed to a slowdown in the U.S. economy, reinforcing expectations U.S. interest rates have peaked.
A weaker dollar typically makes dollar-denominated assets like copper less expensive for overseas investors.
LME three-months copper eased $10 at the close to $7,550 a tonne.
"We entered slightly into a gap above $3.4650, but some profit-taking going into the close limited the move. As long as we settle below that level, we're still kind of on the defensive," said Scott Meyers, senior trading analyst with Pioneer Futures.
"There is a gap that needs to be filled up to $3.5350, so we will see how that plays out next week," Meyers added.
Copper for December delivery
Spot September
COMEX final copper volume was estimated at 10,000 lots against Thursday's official count at 15,035 lots.
"The open interest in the market is very low, so that tells you that there does not seem to be a lot of big-time shorts in there, so that's probably why we're holding up the way we are," said one broker at a New York trading house.
As of Sept. 21, open interest in the COMEX copper market grew 424 lots to 68,516 lots.
Despite copper's technical rebound this week, analysts were quick to point out that prices were still trading within a wide band with concerns over U.S. economic growth weighing on the upside, while low stock levels in exchange-registered warehouses were seen limiting the declines.
Drawdowns in exchange-registered warehouses underpinned the early buying on Friday after inventory data out of London showed a 2,050-tonne decline, leaving total stocks at 121,275 tonnes -- less than three days worth of global consumption.
Copper inventories in warehouses monitored by the Shanghai Futures Exchange fell to 43,019 tonnes in the week ended Thursday, from 44,944 tonnes the week prior.
Chinese copper prices were expected to rise as Beijing's ban on duty-free imports of refined copper for some copper products would raise prices for imported metal, traders said on Thursday.
Upcoming labor contract renewals at major miners could disrupt supplies if talks between the two sides break down.
"Low stocks and the potential for supply disruptions is still seen supporting sentiment with consumer/investor buying being noted into price dips," said Robin Bhar, metals analyst with investment bank UBS.
The dollar weakened against the euro on Friday after economic data this week pointed to a slowdown in the U.S. economy, reinforcing expectations U.S. interest rates have peaked.
A weaker dollar typically makes dollar-denominated assets like copper less expensive for overseas investors.
LME three-months copper eased $10 at the close to $7,550 a tonne.
Subscribe to:
Posts (Atom)