Oct. 3 (Bloomberg) -- Copper prices in New York rose to a record as stockpiles dropped the most in 10 weeks and Falconbridge Ltd., Canada's biggest mining company, idled its Ontario refinery because of a strike.

Global inventories monitored by the London Metal Exchange fell 4 percent to 79,950 metric tons, the biggest decline since July 22. Falconbridge shut its Kidd Creek operation in Timmins, Ontario, Oct. 1 after failing to reach a new contract with workers. Copper has rallied 25 percent in the past year.

``There's a large stock draw, coupled with strike activity at Falconbridge,'' said Tom Boustead, an analyst at Refco LLC in New York. ``Those two factors are supportive for the price.''

Copper futures for December delivery rose 2.95 cents, or 1.7 percent, to $1.757 a pound at 11:54 a.m. on the Comex. Earlier, prices rose as high as $1.758, surpassing last week's record. A futures contract is an obligation to buy or sell a commodity at a set price by a specific date.

Inventories fell 1.2 percent last week, the first decline in nine weeks, the London Metal Exchange said. The decline came after inventories had tripled from a 31-year low of 25,525 on July 22.

Lower stockpiles may help push prices as high as $2 a pound on the spot market in London, up from the current spot price of $1.7713 a pound, Ian Howat, a Toronto-based metals analyst at National Bank Financial, said today in a report to clients.

``With strong fund buying and limited inventories, we now think inventories will take longer to get to levels that will dampen the markets enthusiasm for the red metal,'' Howat said in the note. He said he will have to boost his price forecast for this year and 2006.

Reaching $2

``If there are any more supply disruptions, it seems possible that prices could get'' as high as $2, Howat said in an interview.

Still, prices are more likely to fall rather than rise because ``U.S. activity is going to slow,'' he said.

Copper may rise as high as $1.8 a pound in the event prices settle above $1.75, some traders said. Prices reached $1.75 or higher during two sessions last week, then fell before trading ended.

``We've been seeing a fairly robust market for the last couple weeks,'' said Scott Meyers, an analyst at Pioneer Futures Inc. in New York. ``The overall picture is very strong demand.''

Copper's gains accelerated in New York after prices climbed above $1.7285 a pound, a so-called ``pivot'' level watched by buyers who follow historical pricing patterns known as technical indicators, spurring further purchases, said Michael Giblin, a partner at Bruckman Trading Corp. in New York.

China Holiday

A weeklong holiday in China, the biggest buyer of the metal, may curb trading this week, some analysts said. The Shanghai Futures Exchange and Changjiang Nonferrous Metals Spot Market are closed for the National Day break.

The holiday in China ``means trading is going to be a bit thinner,'' Boustead said. ``Sometimes you can get big price swings when the market is a little thin.''

In London, copper for delivery in three months rose $44.50, or 1.2 percent, to $3,814 a ton ($1.73 a pound).

To contact the reporter on this story: Jennifer Itzenson in New York at jitzenson@bloomberg.net.

Last Updated: October 3, 2005 11:55 EDT