Copper Continues to Heat Up

Thanks to China, of course. Bloomberg reports that though copper demand is falling in the US -- US industrial output fell 0.6% in September, and demand for base metals including copper moves in line with industrial output -- it's CHINA that is the world's #1 source of copper demand. And Chinese demand is booming.

As a result, inventories of copper at the London Metals Exchange have fallen below three days' worth of supply.

Last month, Goldman Sachs projected that copper consumption would outpace supply by 101,000 tons this year.

And if you think that's tight, you should see zinc. It's in a huge supply deficit, one that won't end until at least the 4th quarter of 2007, according to BNP Paribas analyst David Thurtell.

Nickel and tin are also super-tight, and aluminum and lead are trending higher.

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