- `Supply is overestimated,' Commerzbank's Briesemann says
- Nickel, tin, aluminum, and lead also climb in London
Copper had its longest rally since June on speculation that output cuts by miners including Glencore Plc will tighten supplies just as demand rebounds.
Glencore this week announced the year’s biggest reductions to production. Miners are trimming output while China, the world’s largest metals consumer, approved railway projects totaling about $11 billion that may spur new demand. Supplies of copper held in Chinese warehouses not monitored by exchanges dropped to the lowest in 21 months.
“Supply is overestimated by the market,” Daniel Briesemann, a Frankfurt-based analyst at Commerzbank AG, said in a telephone interview. The Chinese government will continue to implement stimulus measures which will spur further demand, he said.
Copper for delivery in three months climbed 0.6 percent to $5,398 a metric ton ($2.45 a pound) on the London Metal Exchange. Prices rose for the fourth straight day, the longest stretch since June 10.
LME figures show that money managers more than tripled their net-long position in the metal to 7,213 contracts as of Sept. 4. Traders were net short, or betting on price declines, as recently as mid-August. Prices are rebounding after touching a six-year low last month on concerns that consumption would slow in China, which accounts for almost half of global demand.
Copper futures for December delivery added 0.4 percent to $2.447 a pound on the Comex in New York. On the LME, nickel, aluminum, lead, and tin rose, while zinc fell.