28 March 2006

Strike lifts copper, analyst says $6000 possible

Creamer Media's Mining Weekly Online, South African Mining News :: News Today: "prices rallied to fresh record highs on Monday as a strike at world No.3 producer Grupo Mexico renewed pressure on limited global copper inventories.

'Supply concerns at the forefront of market attention and any threats to production are feeding straight through to price,' Barclays Capital analyst Ingrid Sternby said.

She added that based on continuing strong demand, the metal used in everything from wiring to plumbing could run up to $6 000 a tonne.

'The trend is still upwards...I see a test of as a distinct possibility,' she said.

Sternby has been a consistent bull and was among the first analysts last year to predict the market would hit $4 000 and later $5 000.

Three-month London Metal Exchange (LME) copper futures hit a fresh record peak of $5 280 a ton overnight in Asia. Ay 1012 GMT they were quoted at $5 230/$5 240, versus $5 250 at the close on Friday.

Other metals were also firm. Zinc rose to a fresh peak of $2 630 a ton, silver hit a 22-year high of $10,90 and ounce. Gold was $10 away from a quarter-century high while other LME metals were mostly steady.

Dealers said a strike on Friday by more than 1 000 workers at Grupo Mexico's 300 000 ton-per-year La Caridad copper mine, was the latest threat to copper supplies."

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