Copper rose to a new all-time high on Thursday on speculation that demand for the metal from builders and manufacturers is outpacing production from mines.
The Chilean Copper Commission, a state-run research group, cut its estimate for the metal’s output and increased its price forecasts for the third time this year amid scarce supplies of the metal. Copper will average $1.62 to $1.66 a pound in 2005, the research group said. Chile is the world’s biggest copper producer.
“This gave an extra push to prices. People are realising shortfalls [of the copper supplies] are real,” said Ingrid Sternby, metals analyst at Barclays Capital.
Copper inventories are low because global copper production has not kept pace with demand.
Three month copper peaked at $4,020.5 a tonne on the London Metal Exchange, up $79 from Wednesday’s late quote. The price rose in spite of news that China is selling large amounts of the metal on to the market and that Asarco, the US copper miner, had reached an agreement with a union to end a four-month strike.
“The market has tended to ignore any bad news, and will probably ignore any bad news for the next one or two weeks,” said Neil Buxton, analyst at GFMS Metals Consulting.
Copper has gained more than 25 per cent this year and has more than tripled since 2001.
Three-month zinc hit a fresh eight-year peak of $1,598 a tonne, supported by fund buying and tight inventories. In late afternoon zinc was trading at $1,592, up $13 on the day.
Aluminium reached an intra-day high of $2,028 a tonne, or $11 below the 10-year high reached last week.
However, nickel fell $30 to $11,870; tin, $25 to $6,250; and lead, $3 to $980.
Oil prices fell to their lowest level in more than four months after the International Energy Agency reduced its forecast for world oil consumption again.
Brent futures for December delivery fell to an intra-day low of $55.22 a barrel, its lowest level since the end of June. December Brent later recovered to close at $55.68 in London, down $1.20.
West Texas Intermediate for December delivery fell to an intra-day low of $57.40 a barrel on Nymex, its lowest level since July 22. WTI, however, recovered to finish off $1.13 at $57.80 in New York.
Precious metals climbed with platinum and palladium leading the rally. Platinum hit a new 25½-year high of $958, its highest price since March 1980, on expectations of persistent strong demand, with some analysts saying $1,000 is the next target for the metal to hit.
Palladium benefited from platinum and touched a new five-month high of $240 an ounce.
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