Copper prices rose, extending a rally to a record approaching $4.50 a pound, on speculation that global supplies will trail demand as the global economic recovery rebounds.
In 2010, copper surged 33 percent as the economy recovered from the deepest recession since World War II, led partly by demand from China, the world’s biggest metal consumer. Analysts at Barclays Capital and Standard Bank Group Ltd. have forecast a shortfall as mining companies fail to keep up with demand.
The metal “is a barometer of the health of the economy,” said Matthew Zeman, a trader at LaSalle Futures Group in Chicago. “People are getting the message that the global recovery is gathering steam. Supply is not going to keep up with demand. China will be back in the market for additional copper.”
On the Comex in New York, copper futures for March delivery rose 1.05 cents, or 0.2 percent, to settle at $4.4575 at 1:23 p.m. Earlier, the price climbed as much as 5.1 cents to a record $4.498. In December, the metal jumped 16 percent, the most since March 2009.
The London Metal Exchange and Shanghai Futures Exchange were closed today for holidays.
The International Copper Study Group has forecast a global shortfall of 435,000 metric tons this year.
Supply disruptions in Chile, the largest producer, are helping to support prices. A Dec. 29 accident at Codelco’s Chuquicamata refinery curbed output, while Anglo American Plc and Xstrata Plc’s Collahuasi mine may not be able to supply all customers after an accident closed a port on Dec. 18.
A magnitude-7.1 earthquake struck near Temuco in southern Chile yesterday, according to the U.S. Geological Survey. The medium-intensity quake cut telephone and electricity lines, the government’s emergency service, Onemi, said on its website. There were no immediate reports of infrastructure damage or injuries.
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