Copper futures prices surged Friday on the Commodity Exchange in New York and closed the week with solid gains stemming from decreasing supplies.
"There's been general improvement in the market for the past six to nine months," said Steven Chronowitz, a metals analyst in New York with Smith Barney, Harris Upham & Co., but prices have failed to make any advances.
Chronowitz said many industries that use copper concentrate their buying in the first quarter of the year, and prices frequently advance during that period.
Bette Raptopoulous, senior metals analyst in New York with Prudential-Bache Securities Inc., noted that inventories of copper at the Commodity Exchange and the London Metals Exchange fell to 379,000 metric tons from 803,000 metric tons a year earlier. Raptopoulous said many domestic mining companies cut back operations over the past 18 months because competition from foreign producers pushed prices below the cost of production.
Because of their low inventories, some producing companies were said to be buying contracts at the futures exchange to meet delivery commitments, such buying has "created a bullish aura" Raptopoulous said.