Copper moves to U.S. $ 10,000 per tonne

Copper was edging US$10,000 a tonne on Friday, with three-month copper rising $25 to $9,995 a tonne on the London Metals Exchange ahead of US non-farm payroll numbers, Reuters reported.

Metals trading has been quiet in recent days due to the Lunar New Year in Asia, while traders in North America and Europe await release of US non-farm payroll data, which is considered an important economic indicator.

Reuters said a number of metals producers in Queensland were restarting operations after Cyclone Yasi hit the Australian province earlier this week. Xstrata’s Townsville copper refinery and port survived the storm relatively unscathed:

“A preliminary investigation of our port facilities has not identified any major structural damage, however a comprehensive site audit of our Townsville port and refinery operations is yet to be completed as part of the recovery planning process,” Xstrata’s local operations chief, Steve de Kruijff, said in a statement emailed to Reuters.

Meanwhile, as copper reached a record $4.54 a pound Thursday, Scotiabank commodities analyst Patricia Mohr said thin inventories of copper and the introduction last month of a copper ETF are lifting the red metal to new heights.

“I’ve been bullish on copper for quite a long time now. I think it could hit $5, ” Mohr told The Vancouver Sun.

“Fundamentally, copper is in a deficit position. World demand exceeds supply, which was a situation that emerged last year. The market didn’t realize that until late in the year and then copper prices started to move up.”

“We think the deficit will be even bigger. Even if China’s demand grows more slowly…you are still going to be in a bigger supply deficit because world mine production is only going to increase something like 1.6 percent.”

Of course, the high price of copper will serve as an inducement for more copper exploration and recommissioning of mines that closed a decade ago when copper prices were less than 70 cents. Strong demand for the commodity in emerging markets, namely China and India, is likely to keep copper prices buoyant in the coming months, analysts say.

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