Copper Rises to Record in London on Fed Speculation: LME Preview

Dec. 10 (Bloomberg) -- Copper may rise as the first exchange-traded products in industrial metals heighten speculation of a metal shortage, a survey showed.
Ten of 16 analysts, investors and traders surveyed by Bloomberg, or 63 percent, said the metal will gain next week. Five predicted lower prices and one forecast little change. Copper for delivery in three months was up 2.8 percent for this week at $8,972 a metric ton at 3 p.m. yesterday on the London Metal Exchange.
Prices yesterday rose to a record $9,091 in London ahead of the launch of the exchange-traded products and as copper inventories tracked by the LME shrank further. ETF Securities Ltd. said Dec. 7 products backed by copper, nickel and tin will start trading on the
London Stock Exchange today. JPMorgan Chase &amp; Co. and BlackRock Inc. have also announced plans to start similar products holding industrial metals.
The ETF launch could add another leg,&rdquo; said William O&rsquo;Neill, a partner at Logic Advisors in Upper Saddle River, New Jersey. 
Demand for the metal used in construction and automobiles will outpace supply by 367,500 tons next year, according to the median forecast of 12 analysts surveyed by Bloomberg. This is the first shortage since 2007, according to the International Copper Study Group, which forecast a 435,000-ton deficit in the refined metal next year. LME copper inventories have shrunk 30 percent this year, on course for the first annual contraction since 2004, and are at the lowest level since October 2009.
The red bars on the attached chart are derived by subtracting bearish forecasts from bullish estimates, with readings below zero signaling the majority of respondents expect a decline. The green line shows the copper price. The survey data shown are as of Dec. 3.
The weekly copper survey has forecast prices accurately in 54 of the past 115 weeks, or 47 percent of the time.
This week&rsquo;s survey results: Bullish: 10 Bearish: 5 Hold: 1
 
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