Copper Rises to 14-Month High on Speculation Demand to Climb

LONDON, Dec. 3 -- Copper rose to the highest price in 14 months on speculation that a rebounding global economy will boost demand for the metal used in pipes and wires.

    Metal markets probably will move toward balance or a supply deficit in the next 18 months as consumption recovers, creating a "supportive landscape" for prices, Goldman Sachs Group Inc. said. Copper prices have more than doubled this year as demand surged in China, the world's biggest user.

    "People are still buying copper on the belief that the economy is recovering and this will boost demand," said Gijsbert Groenewegen, a partner at Gold Arrow Capital Management in New York.

    Copper futures for March delivery rose 2.75 cents, or 0.9 percent, to $3.2585 a pound on the Comex division of the New York Mercantile Exchange. Earlier, the price reached $3.273, the highest level for a most-active contract since Sept. 23, 2008.

    This year, the dollar's slump against major currencies boosted the appeal of copper and other raw materials as alternative investments.

    Manufacturing expanded at the fastest pace in five years in China in November and rose for a fourth month in the U.S., reports showed yesterday.

    'Leading Indicators'

    The statistics are "leading indicators of industrial production and derived demand for raw materials," signaling more consumption, Morgan Stanley said in a report today

    Copper for delivery in three months gained 0.7 percent to $7,125 a metric ton ($3.23 a pound) on the London Metal Exchange.

    LME prices will average $6,834 a ton next year, 3 percent above a prior forecast, Goldman Sachs said. The metal has averaged $5,052 in 2009.

    Zinc, aluminum, nickel, lead and tin prices also climbed in London.

    (Source: Bloomberg)