Copper Future Prices Rose on Rising Demand

Copper futures for March delivery rose 6.45 cents, or 1.4 percent, to $4.609 a pound at 10:06 a.m. on the Comex in New York. Earlier, the price reached a record $4.613.

The global supply deficit will reach 822,000 metric tons in 2011, more than double last year?s shortfall, Barclays Capital said on Jan. 20. JPMorgan Securities Ltd. and Macquarie Bank Ltd. also predicted a deficit, and Australia & New Zealand Banking Group Ltd. and Morgan Stanley have boosted their price forecasts.

Copper extended a rally to a record on mounting concern that the global economic recovery will boost consumption of the metal used in cars, homes and appliances while mining companies struggle to increase production.

Freeport McMoRan Copper & Gold Inc., the world?s largest publicly traded copper miner, said the market will be ?tight in 2011, and for the foreseeable future.? The metal has more than tripled since 2008 on rising demand from China, the world?s largest buyer. In the U.S., the second-biggest user, unemployment fell in January to the lowest level since April 2009, the Labor Department said today.

?Demand for copper continues to be robust and growing,? said James Dailey, who manages $185 million at TEAM Financial Asset Management LLC in Harrisburg, Pennsylvania. ?Bringing copper production online is very costly and protracted, so it may be some time before production levels are able to grow fast enough to offset the growth in demand.?

China Demand

?We have continuing strong demand out of China and the prospects of continued recovery in the U.S. and in parts of Europe,? Kathleen Quirk, Freeport?s chief financial officer, said yesterday in a telephone interview from Phoenix. ?That is also overlaid on a situation where supply is very limited. Our industry hasn?t been able to expand capacity fast enough to meet the demand.?

Copper for three-month delivery added $152.25, or 1.5 percent, to $10,082.25 a ton ($4.57 a pound) on the London Metal Exchange. Earlier, the metal climbed to $10,095, the highest ever.

Also in London, tin climbed 2 percent to $31,150 a ton after reaching a record $31,199. Before today, prices were up 14 percent this year. PT Timah, the biggest supplier of the metal, said on Jan. 14 its production may drop for a fourth straight year in 2011.