Copper prices climb on global demand expectations

AP News
|
Posted: Apr 06, 2011 4:22 PM
Copper prices climb on global demand expectations

Copper prices rose Wednesday on expectations that global demand will remain brisk and supplies will tighten.

Copper prices settled up 2.5 percent, leading most metals higher. Oil rose slightly while other energy and agricultural products were mixed.

The improving global economy is expected to drive more demand this year for copper, which is used in manufacturing an array of products from electronics to construction materials.

While global copper inventories have risen, overall supplies are expected to remain tight, BNP Paribas analyst Stephen Briggs said.

Analyst Nikos Kavalis with GFMS Ltd., a London metals research firm, said investor interest in copper has picked up because of supply-demand expectations.

However, he noted in a forecast issued Wednesday that prices could fall if there is an impact on demand from Europe's financial problems, China's monetary policy, industrial production outlooks in key markets or other geopolitical events.

Copper and other commodities benefited from a weaker dollar. Since most commodities are priced in dollars, they become more of a bargain for buyers who use other currencies.

Copper for May delivery rose 10.55 cents to settle at $4.37 a pound. July platinum added $1 to settle at $1,797.80 an ounce while June palladium fell $8.50 to settle at $784.60 an ounce.

Gold and silver continued to post gains. Gold for June delivery added $6 to settle at $1,458.50 an ounce and silver gained 20.4 cents to $39.387 an ounce.

In other trading, oil benefited from the weaker dollar. The price has been gaining steadily for weeks because traders are worried supplies may be disrupted by uprisings in Libya and other countries in the Middle East and North Africa.

Libya produces nearly 2 percent of the world's oil, and an extended shutdown could threaten the production capacity of other OPEC members that are covering some of the shortage.

Benchmark crude for May delivery rose 49 cents to settle at $108.83 a barrel on the New York Mercantile Exchange.

In other Nymex contracts for May, heating oil added 0.62 cent to settle at $3.1912 per gallon, gasoline fell 0.84 cent to $3.1929 per gallon and natural gas lost 8.5 cents to $4.146 per 1,000 cubic feet.

In contracts for May delivery, wheat fell 4 cents to settle at $7.8225 a bushel, corn fell 3.75 cents to $7.63 a bushel and soybeans rose 3.25 cents to $13.765 a bushel.