On Friday, copper futures for May gained for the fourth consecutive day, reaching a one-month high. They rose 1.9 percent to reach $4.4985 per pound. Earlier in the day, these futures hit $4.5075, a one-month record. The movement was based on anticipation of strong demand from worldwide economies. Employment looks more positive in the U.S., services and manufacturing industries in Europe are increasing faster than anticipated, and a recovery in exports was just reported by Germany.
Freeport-McMoRan and Rio Tinto were two of the mining giants publicizing their expectations of strong Chinese copper demand. Despite this, some analysts are still skeptical, pointing to articles that question the sharp rebound of the metal. Ed Meir, a Man Financial analyst, said that an article in the Financial Times claimed there are likely large hidden stockpiles within China.
According to ANZ Research, copper buyers in Japan paid a premium of $110 per ton cost, insurance, and freight for cathode. The seller is guessed to be Codelco, the largest producer of the metal worldwide. The report from ANZ noted that these premiums are a significant increase from the $80 per ton seen after the disasters in Japan.
Market participants report that damaged smelters in Japan are purchasing copper cathodes and selling concentrates to meet their annual sales contracts. Shares in producers Southern Copper and Freeport-McMoRan rose on Friday. Caterpillar and Joy Global, two mining equipment makers, also saw an increase in stock prices on Friday, while competitor Bucyrus remained flat.
The metal fared much better than did natural gas futures, which continued their decline on Friday due to expected milder temperatures in the coming months. Natural gas for May delivery experienced a 0.6 percent decline to $4.032 per million BTUs. Deutsche Bank reports that near-term pricing will be subject to weather conditions but remains constructive toward the fuel for late 2011 into 2012.
