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Last Updated: Monday, 24 April 2006, 06:44 GMT 07:44 UK
Copper price nears $7,000 a tonne
Construction workers in China
Demand in China has boosted copper prices
The price of copper has risen to nearly $7,000 a tonne on the back of strong demand and worries over supply.

Copper was up $110 on Friday's close to $6,940 a tonne in early Monday trade.

The rise in metal prices, including copper which is used in construction and electronics, has been prompted by growing demand from developing nations.

Copper prices also rose following concerns that supplies could be disrupted by strike action in mines in Mexico and Chile.

All metals 'precious'

Strong demand from China, combined with a lack of investment in new mining projects, has caused surge in commodity prices.

The rise in copper follows peaks in recent weeks in silver, gold and other metals.

"The evidence is the underlying trend is very strong" said Peter Richardson, chief metals economist at Deutsche Bank. "All metals are becoming precious," he added.

The price of copper has risen by 57% this year and has increased nearly five-fold from when it was under $1,400 a tonne in November 2001.

The rise in commodities has prompted investment banks to launch many new funds that specialise exclusively in metals and oil.

Shanghai copper futures hit a record high, with May contracts hitting $7,794 a tonne.

The price of zinc, which is used as an anti-corrosive coating in steel production, has been particularly strong this year, increasing by 76% due to increased demand from the steel sector.

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