Heady Chinese growth burnishes nickel and copperadmin
Copper rose steeply Thursday and nickel reached another record high after China, the world’s largest consumer of industrial metals, said that its economy expanded at the fastest pace in 11 years.
Gross domestic product in China expanded 10.4 per cent in the fourth quarter from a year earlier, the National Bureau of Statistics said. The economy grew 10.7 per cent in 2006.
“This is supporting demand for metals,” RBC Capital Markets traders said in a report. Copper for delivery in three months gained $135 to $5,850 a tonne on the London Metal Exchange. The metal has declined 7.6 per cent this year.
The exchange’s index of six industrial metals has more than quadrupled in five years as the booming Chinese economy stokes demand for the raw materials needed for cars, buildings and appliances. Chinese copper consumption will climb 7.8 per cent in 2007, according to Maike Futures in Shanghai.
Copper extended its gains Thursday even after the exchange reported that stockpiles rose 2.7 per cent to 203,375 tonnes, the first time they have surpassed 200,000 tonnes since March 2004.
Producers of copper are still expanding output to benefit from higher prices. Jiangxi Copper, the biggest Chinese producer, said that it would increase capacity by 25 per cent this year to 550,000 tonnes, and to 700,000 tonnes next year.
Nickel for three-month delivery rose as much as $1,348 to $38,798 a tonnes on the London exchange, beating the record set Wednesday by $296. Prices of nickel have more than doubled in the past 12 months as production of stainless steel in China expanded almost 50 per cent last year, according to GFMS Metals Consulting in London.
Gold futures for February delivery rose $4.10 to $658.60 an ounce in afternoon trading on the Comex division of the New York Mercantile Exchange, thanks to surging investment demand.
Crude oil for March delivery fell 41 cents to $54.96 a barrel on Comex as speculation rose that U.S. fuel stockpiles were adequate to meet increased demand for heating oil next week.