Copper Rises as Codelco, Biggest Producer, Predicts Stronger 2011 Demand

Copper rose in New York and London as Codelco, the world’s largest producer of the metal, predicted stronger demand next year.

The company sees demand gaining between 4 percent and 5 percent, Chief Executive Officer Diego Hernandez said yesterday in an interview, adding that copper may average near $4 a pound in 2011. That compares with $3.3858 so far this year, data compiled by Bloomberg shows. Copper advanced to a 31-month high yesterday on the Comex in New York.

“This latest price surge has its roots embedded firmly in a mix of concentrate supply constraints which has limited output to a miserly increase of just 1.5 percent this year against burgeoning demand from emerging markets led by China,” Alex Heath, head of industrial-metals trading at Royal Bank of Canada Europe Ltd. in London, said in a report.

Copper for delivery in March rose 2.9 cents, or 0.7 percent, to $4.0785 a pound on the Comex at 9:14 a.m. New York time, erasing a decline of as much as 1.8 percent. Prices yesterday reached $4.1315, the highest level since May 5, 2008. Copper for delivery in three months added 0.6 percent to $8,932 a metric ton on the London Metal Exchange.

Tin for three-month delivery on the LME rose 1.6 percent to $25,600 a ton. Prices reached a record $27,500 on Nov. 9. The metal has jumped 51 percent this year, leading advances on the exchange, after production was disrupted in Indonesia and the Democratic Republic of the Congo.

PT Timah, Indonesia’s largest producer of the metal, said 2011 tin output may be less than 40,000 tons because of rainfall throughout the year.

Aluminum gained 1.1 percent to $2,331 a ton and nickel lost 0.4 percent to $24,000 a ton. Lead added 0.8 percent to $2,420 a ton and zinc added 0.2 percent to $2,310 a ton.