Copper rises on expectations of stronger demand

AP News
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Posted: Mar 16, 2011 3:50 PM

Copper prices are rising on expectations that Japan will need more of the metal as it rebuilds after the devastating earthquake and tsunami.

Copper rose 6.2 cents Wednesday to settle at $4.1870 a pound. The metal is used in manufacturing an array of products including pipes and wiring for construction.

Japan is struggling in the aftermath of the quake and tsunami that destroyed towns and killed thousands of people. It also is dealing with a nuclear power plant crisis.

"You're going to need copper first because that's going to be for infrastructure and the rebuilding aspect," Lind-Waldock senior market strategist Phillip Streible said.

Japan's economy, which is the third-largest in the world after the U.S. and China, accounts for about 10 percent of U.S. exports. It is a huge importer of raw materials, from oil to grains.

The uncertainty of what's next for the island nation has rattled markets around the world. Streible said he expects the commodities markets to remain volatile into next week until Japan gains control over its damaged nuclear power plants.

Other commodity prices were mixed as Japan's crisis and uprisings in the Middle East overshadowed disappointing U.S. data. The government said new home construction fell to the second-lowest level on record in February and wholesale prices rose last month.

In metals trading, platinum and palladium, which are used in automobile catalytic converters, gave up early gains after Japanese auto companies extended shutdowns of car-assembly plants.

April platinum fell $5.10 to settle at $1,700.50 an ounce while June palladium added 15 cents to settle at $705.05 an ounce.

April gold rose $3.30 to settle at $1,396.10 an ounce and May silver added 35.5 cents to settle at $34.472 an ounce.

In other trading, oil prices rose as anti-government clashes continued in Bahrain. Although Bahrain doesn't produce much oil, it is adjacent to Saudi Arabia, the world's biggest producer of oil.

Analysts fear the unrest could spread into Saudi Arabia and pose a threat to oil production there. So far protests have been minimal in Saudi Arabia.

Benchmark oil for April delivery rose 80 cents to settle at $97.98 on the New York Mercantile Exchange.

In other Nymex trading for April contracts, heating oil added 4.34 cents to settle at $2.9972 a gallon and gasoline gained 4.08 cents to $2.8437 a gallon. Natural gas fell 0.3 cent to settle at $3.938 per 1,000 cubic feet.

Grains and beans were mixed. In contracts for May delivery, wheat fell 5.75 cents to settle at $6.62 a bushel, corn dropped 19.5 cents to $6.165 a bushel and soybeans added 17 cents to $12.87 a bushel.

Japan is struggling in the aftermath of the quake and tsunami that destroyed towns and killed thousands of people. It also is dealing with a nuclear power plant crisis.

Other commodity prices are mixed because of the uncertainty about what may be ahead for Japan and uprisings in North Africa and the Middle East.

The events are overshadowing disappointing U.S. data that showed new home construction fell and wholesale prices rose last month.