Speculators’ Money Lifts Copper and Nonferrous Metal Prices

International nonferrous metal market keeps increasing. The price of copper, zinc, aluminium and nickel hit the year high at London Metal Exchange on Friday. Higher copper price leads the other metals’ market price. However, Japanese industry interests warn the price is supported by speculative purchase, not by actual demand when LME copper inventory increases.

LME copper price increased by US$ 77 to US$ 5,551 per tonne at the settlement on Friday from Thursday. The price was supported by positive US stock market along with production trouble at Collahuasi mine of Chile.

The demand is firm in China when the government invests heavily in rail and power supply network as stimulus package. Japanese demand also improves recently. However, the smelters cannot increase the production due to limited supply of the materials of scrap and ore.

Under the tight supply, speculators expand the purchase of the metal. The more money into metal market also impacts on other metals. However, LME copper inventory increased to 273,950 tonnes on Friday, which was around 6% higher than the recent bottom on July 14.