Copper Approaches All Time High (FAL)

Copper prices ticked up near an all-time high on April 26th, supported by fund buying and global supply constraints as well as sharp gains in Shanghai futures on short-covering.

Copper stockpiles in warehouses monitored by the LME dropped 100 tons today to 111,650 tons, an amount that is less than three days of global consumption. Inventories have dropped 8.4 percent this month. As much as 11,775 tons of LME copper stockpiles are under "canceled warrants," which means the metal has been bought and will move from warehouses, according to LME data. Copper stocks were almost 1 million tons in April 2002.

Prices for copper, used in wiring, tubing and coins, have risen as much as 68 percent this year and were up more than five-fold from cyclical lows in 2001 on strong demand and tight supply after years of under-investment in new mining projects. Labor disputes at mining operations in Mexico and elsewhere also added pressure on the supply side. More than 300 workers at the Lomas Bayas copper mine in northern Chile will know by Thursday night whether or not they call a strike or accept a contract offer from Canada's Falconbridge (FAL).

Brokers in Shanghai said on Wednesday that high copper prices are prompting many Chinese brokerages to raise margin requirements for their clients.

London Copper US$ /ton