| Author |
 Topic  |
|
|
Ardent Listener
Administrator
USA
4841 Posts |
 Posted - 11/06/2007 : 18:23:38
|
Updated: New York, Nov 06 19:20London, Nov 07 00:20Tokyo, Nov 07 09:20
Copper Rises on Speculation Weak Dollar May Boost Metal Demand
By Millie Munshi
Nov. 6 (Bloomberg) -- Copper rose, halting a six-session decline, on speculation a slumping dollar will boost demand from buyers holding other currencies.
The dollar fell against a basket of six major currencies today and touched a record low against the euro. The dollar will slide further as investors shift into higher-yielding assets, according to BNP Paribas SA, the largest French bank. Copper has gained 16 percent this year as the dollar lost 9.1 percent against the basket of currencies.
``The weaker dollar is affecting the market,'' said Patrick Chidley, an analyst at Barnard Jacobs Mellet LLC in Stamford, Connecticut. ``It's making copper now look less expensive for overseas buyers and raising interest.''
Copper futures for December delivery gained 3.95 cents, or 1.2 percent, to $3.33415 a pound on the Comex division of the New York Mercantile Exchange.
The U.S. currency earlier today traded at an all-time low of 1.457 per euro in New York. The dollar has declined against all of the world's 16 most-actively traded currencies in the past three months.
``There's extremely negative sentiment toward the dollar, which is only going to mean higher commodity prices,'' said Chip Hanlon, who manages about $1.2 billion as president of Delta Global Advisors Inc. in Huntington Beach, California.
Copper also rose today as a labor dispute in Peru raised supply concerns, Chidley and other traders said. The national mining strike, now in its second day, will spread as more workers walk off the job to demand higher pay and pension benefits, a union spokesman said.
Output Threatened
The walkout, Peru's second national mining strike this year, may affect output at companies including Southern Copper Corp. and Freeport-McMoRan Copper & Gold Inc., the world's largest publicly traded producer of the metal.
``If the strike goes on for awhile, people will start to take bigger notice of it,'' said Donald Selkin, director of equity research at Joseph Stevens & Co. in New York.
Copper is still in a ``downtrend'' as signs of a weaker U.S. economy and growing metal stockpiles signal a period of slumping demand, Selkin said. Citigroup Inc., the biggest U.S. bank, said this week it may write down as much as $11 billion of subprime debt.
``We thought that the subprime crisis was behind us, but now with the bank writedowns, it brings up more concern about the U.S. housing situation,'' Selkin said. ``That and the rising inventories in London are disappointing for copper.''
Before today, the metal had dropped 6.7 percent in the previous six sessions as rising inventories signaled falling consumption. Stockpiles monitored by the London Metal Exchange gained 125 metric tons today to 168,550 tons, the highest level since April 20.
China Demand
Copper demand in China, the world's biggest consumer of the metal, may also decline, Scotia Capital analysts led by Na Liu in Toronto said in a report today.
``The slowdown in the U.S. housing market is not only depressing U.S. copper usage, but also hurting'' China's exports to the U.S., Liu said.
The decline in exports has eroded production at Chinese copper-tube mills, he said.
On the LME, copper for delivery in three months gained $75, or 1 percent, to $7,480 a ton. The metal rose to a record $8,800 a ton in May 2006.
To contact the reporter on the story: Millie Munshi in New York at mmunshi@bloomberg.net .
Last Updated: November 6, 2007 14:21 EST
You must be logged in to see this link.
****************
Fanaticism is doubling one's efforts, yet forgetting one's purpose.
*********************
Realcent.forumco.com disclosure please read
All posts either by the members, moderators, and the administration of You must be logged in to see this link. are for entertainment purpose only. It is not the intent of realcent.forumco.com to provide investment, medical, legal or tax advice and nothing posted here should be considered to be so.
|
|
|
fiatboy
Administrator
912 Posts |
Posted - 11/06/2007 : 20:03:04
|
Earlier this year, I was teaching English to a Chilean businessman, and it just so happens that he is on the board of directors at a large copper mining company in Chile. We got to talking about mining and copper, and he mentioned offhand, that there will soon be a turning point in the copper industry. He elaborated on many arcane, mining-related topics I didn't fully understand, but the gist of what he said was that, although copper supply largely outpaces demand, the current price of copper is contingent upon the assumption that production at copper mines the worldover will continue apace, and that new mines will be coming online very soon. He said it's madness. The metrics are wrong, and prices must rise. He expects that to happen by the end of 2008 at the latest.
I hope he's right!
And for what it's worth, talking to him was fascinating not just because I like copper, but because he had an enthusiasm for copper I have never seen before---except by the members of the forum. haha.
"Bart, it's not about how many stocks you have, it's about how much copper wire you can get out of the building." --- Homer Simpson |
 |
|
| |
Topic |
|
|
|
Cu up on weak dollar
Forum Locked
