Copper futures could be set to rise in the coming weeks, as existing stockpiles of the metal fell for the 31st week in a row, Bloomberg News reported Thursday. Inventories monitored by the London Metal Exchange fell close to the lowest level since last November.
In addition, the contango – the discount of spot copper to futures contracts – shrank today, indicating an increase in immediate demand.
"Continued stock drawdowns mean the market is looking very tight," Gayle Berry, an analyst with Barclays Capital, told the news service. "The fact that we’re beginning to see nearby spreads tighten is reflecting that there is increased demand for spot material."
Copper futures for December delivery rose 0.2 percent to $3.575 per pound on the Comex in New York; meanwhile, cash copper went for $3.4952 on the London Metal Exchange.
Copper's price movements may be determined by the health of the U.S. construction industry, which has been faltering since a new homebuyer's credit expired this spring. The credit failed to boost total demand much, instead simply compressing purchases into the first half of 2010.
But after the initial drop-off and some big corrections during the summer, it looks like the market may be recovering. Existing home sales rose 7.6 percent to a seasonally adjusted annual rate of 4.13 million in August, up from a rate of just 3.84 million in July, according to the National Association of Realtors.
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