Supply Doubts Push Copper Prices to New Record
Source: Reuters (7/3/08)
Copper soared to a record high on Thursday as a strike in Peru stoked supply fears and as investors sought alternatives to equities, while surging oil pushed aluminium to a four-month peak.
Copper for three-month delivery on the London Metal Exchange was at $8,835/8,855 a tonne at 1000 GMT, down from an earlier record high of $8,940. It closed at $8,720 on Wednesday.
Aluminium was up at $3,205/3,215 a tonne from $3,200 on Wednesday. Earlier in the session it reached $3,229 a tonne -- the highest level since March 7.
"The rise in prices is a confluence of recent factors: the weak dollar, the record oil price and the continued spate of production problems," said Robin Bhar, an analyst at Calyon.
Workers at Freeport-Mcmoran's Cerro Verde pit, Peru's third-largest copper mine, joined a nationwide strike that entered its third day on Wednesday. A global sell-off knocked world shares to a five-month low on Thursday as surging oil fanned concerns about inflation and slowing growth, just hours ahead of an expected euro zone interest rate hike and a key U.S. jobs report.
"Weakening stock markets are something we can't ignore, particularly at the beginning of a new quarter and the second half of the year," Bhar said.
"We are seeing fund inflows although they are being a lot more sophisticated about it by going for the markets that are really tight like copper and aluminium."