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Industrial Metals Today: Copper Rises, Iron Ore Under Pressure

May 28, 2014 at 20:38 by Vladimir Vyun

Copper rose in London today on hopes that accelerating economic growth in the United States will spur demand. Speculations that China will stimulate its slowing economic growth were also helping the metal. Meanwhile, inventories monitored by the London Metal Exchange sank 3.8 percent to 169,825 tons today, demonstrating the biggest drop in more than six years. Stockpiles were down 54 percent this year. Contract for delivery of copper in three months ticked up 0.1 percent to $6,940.75 per metric ton on LME today and touched $6,970 intraday, the highest price since March 7. Futures for delivery of the metal in July dipped $0.0085 (0.27 percent) to $3.1690 per pound as of 20:17 GMT on COMEX today.

Iron dropped today, falling to the lowest level in 20 months, on speculations that output will exceed demand, resulting in a glut. Mining companies ramped up production, hoping that impressive economic growth in China would create enough demand to warrant additional supply. Yet China’s economy is losing its growth momentum, meaning that such way of thinking might be wrong. Stockpiles in Chinese ports rose 31 percent this year, reaching the record 13.30 million tons last week. Global supply should exceed demand by 175 million metric tons next year, according to analysts, as steel makers are reluctant to buy new ore. The Steel Index Ltd. reported that prices for ore containing 62 percent of iron dropped 1.3 percent to $96.80 per dry ton today.

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