Record copper price tests $10,000
Copper has hit a fresh record high just below $10,000 a tonne on
hopes of increased demand amid supply shortages, which could be made
worse by giant Cyclone Yasi in Australia.
Metals have been strong across the board this week, with tin hitting
a record and nickel at its highest since May 2008. The weak dollar has
led investors trading in other currencies to seek commodity investments.
 Economic data has also shown strong demand from the Asian
manufacturing sector, especially for copper. Analysts pointed out that
the most recent rally in the copper price may be less about fundamentals
than the unwinding of positions in Shanghai ahead of the Chinese New
Year. However, there are still signs that there will be a shortage of
the red metal this year, as mining companies have been reporting lower
than expected production.
BHP Billiton, Xstrata and Rio Tinto found that output dropped 12pc in
the first half of 2010. It appears that this trend continued in the
second half of last year as well.
Copper prices have tripled over the last two years. The City expects
prices to head towards $12,000 per tonne by 2012, owing to spiralling
demand and lack of new investment in mines. The metal closed on
Wednesday at $9,945.25 a tonne.
Australia's huge Cyclone Yasi forced a copper refinery and coal mines
to shut and paralysed sugar and coal exports as it began pounding the
northeast coast on Wednesday, threatening to further inflate world
sugar, copper and coal prices. The edge of the cyclone, one of the most
powerful recorded, came ashore in North Queensland state, heading
directly for sugarcane fields and threatening a 300,000-tonnes-a-year
copper refinery in the coastal city of Townsville.
"We've shut everything down and that situation is likely to carry on
for several days until a clearer picture emerges," said Josh Euler, a
spokesman for the refinery owner, Xstrata.
Earlier this week, a 30,000 tonnes-a-year nickel refinery at Yabulu
shut down ahead of the cyclone, and the major coal export terminals of
Dalrymple Bay and Gladstone stopped loading ships. Shipping in and out
of the region has come to a standstill, with ports along hundreds of
kilometres of coastline closed and bulk carriers retreating from the
cyclone zone to safe anchorages.
Courtesy: The Telegraph
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