The Associated Press 2007

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Copper rose to a record close as investor demand for metals, energy and agricultural products extended the rally in raw-materials prices.

The metal closed at $4 a pound for the first time ever. Earlier, futures for May delivery touched $4.022 a pound on the New York Mercantile Exchange's Comex division, approaching the record of all-time record intraday high of $4.04 set in May 2006. Commodities surged the most in seven weeks today, with crude oil and corn reaching records, as traders snapped up futures as a hedge against inflation.

A "tidal wave" of $70 billion has poured into commodity markets this year from hedge funds and other investors, Citigroup Inc. said in a report this week. Copper has gained more than fivefold since 2001 as consumption surged in China, the world's largest metals buyer.

Global copper demand "remains strong and there are challenges to the industry to provide supplies of copper," Richard Adkerson, CEO of Freeport-McMoRan Copper & Gold Inc., said today. "To have copper approaching $4 a pound is remarkable."

Robust global consumption will buoy copper, Adkerson said in a Bloomberg Television interview. Freeport, based in Phoenix, is the world's biggest publicly traded copper producer.

"We see a very strong market," said Bret Clayton, chief executive officer of Rio Tinto Group's copper division. "We are in a very finely balanced market, with very low stock levels."

Copper supplies may fall short of demand this year, Clayton said in an interview in Santiago today. He said China's copper consumption may grow as much as 10 percent this year. Citigroup estimates China accounts for 24 percent of copper consumption.

Physical demand, not speculative investment, is driving copper prices, Clayton said. Rio Tinto is the world's third- largest mining company.

Still, some analysts have expressed concern over the role investors have played in copper's rise this year.

Speculators, not physical supply or demand issues, were the driving force behind copper's rally this year, according to Austin Brown, an analyst at the $3.5 billion hedge fund Touradji Capital Management LP. He commented on the rally last week.

A "buying orgy" in commodities inflated prices and increased the risk of collapse, Touradji founder Paul Touradji said in March.

A commodity "bubble" could be poised to burst, Tobias Levkovich, Citigroup's chief U.S. equity strategist, said last month. The Reuters-Jefferies CRB Index of 19 futures has gained 30 percent in the past 12 months, including a 14 percent rise this year.

A slumping dollar and the prospect of accelerating inflation also boosted the copper price today.

"Once we get another big break in the dollar, that's when we'll see another good push in copper," said Matthew Zeman, a trader at LaSalle Futures Group Inc. in Chicago. "As the dollar keeps moving lower, copper will" surpass its record.