Copper futures prices were sharply higher Wednesday on the Commodity Exchange in New York as a rally in the industrial metal extended into its third day.
The metal is in short supply for immediate delivery, said Howard Levine, a metals analyst in New York with Donaldson, Lufkin & Jenrette. He noted that buyers were willing to pay a hefty premium to obtain immediate delivery of copper.
The London Metals Exchange reported Tuesday that its stocks had declined by 4,400 metric tons in the previous week to 82,800 metric tons, the lowest level in 11 years, Levine said. A metric ton is 2,204 pounds.
"That stock is the cutting edge of copper's fundamental strength," said Levine. "It represents ongoing evidence that world consumption is outstripping world production."
Analysts on the floor said much of the buying Tuesday and Wednesday was said to be coming from a single source, which may have been offsetting earlier agreements to sell the metal. They noted that the number of open contracts has been declining in recent sessions.