LME Copper Price Reaches Over US$ 5,000

The copper spot price at London Metal Exchange (LME) exceeded US$ 5,000 per tonne on Thursday, when LME copper inventories are still at the historically low level, Chinese State Reserve Bureau (SRB) builds up massive short positions of copper and troubles happened at overseas copper smelters. Much speculative money inflows to the non-ferrous metals market including copper, aluminium, lead and zinc. Nippon Mining & Metals raised the official copper ingot price on Friday by 20,000 yen to 650,000 yen per tonne for domestic shipment in February. Japanese copper related makers and dealers are in confusion when the official price was revised irregularly in only 2 days after the previous revision.LME copper settlement price soared by US$ 58.5 to US$ 5,007.5 per tonne on Thursday from a day ago, which marked the highest for 2 straight days after the LME transaction shifted from pound-based to dollar-based. Copper spot price also hit the record at 231.85 cents per pound at New York Mercantile Exchange (NYMEX), up by 5.95 cents from the previous day.Copper ingot supply might change from shortage in 2005 to surplus by 100,000-300,000 tonnes against demand in 2006. However, the supply is tight at present due to troubles in overseas copper smelters. LME copper stock decreased again to abve 90,000 tonnes, though which increased to above 100,000 tonnes on January 9 and seemed to turn upward. The stock is still at the historically low level.Copper metal production is likely to increase in the second half of 2006. However, market players say surplus positions might be absorbed by copper users when they minimized their copper inventories due to the price soar. Supply-demand balance could reverse easily with natural disaster or strikes at copper mines, said Mikinobu Ogata, Copper Sales & General Manager of Sumitomo Metal Mining.Massive short positions of Chinese SRB might impact LME copper price after this week, which is said over 200,000 tonnes. SRB seems to have made settlement of 60,000 tonnes for the positions in December and leaves each 70,000 tonnes for February 2006 and February 2007, according to some reliable sources. Speculators could target LME copper with the in