BLBG: Copper Climbs From Near Four-Year Low in London as Dollar Falls
By Li Xiaowei
Dec. 18 (Bloomberg) -- Copper rose from near its lowest in four years in London as the dollar’s seven-day decline against the euro improved demand for alternative investments.
The metal, headed for a record annual decline, fell 9 percent the past four days amid a slump in demand and rising inventories. The dollar is down 6.2 percent against six major currencies this week after the Federal Reserve said it will target a near-zero interest rate to shore up the U.S. economy.
“The weakness in copper isn’t going to end in a short term,” Zhao Kai, an analyst at Jinru Futures Co., said in an e- mailed report today. “The dollar’s declines should restrain the metal from further big falls.”
Copper for three-month delivery rose as much as 1.2 percent to $3,055 a ton on the London Metal Exchange and traded at $3,025 at 12:05 p.m. in Shanghai. It fell to $2,940.25 yesterday, the lowest intra-day price since January 2005.
The metal used in electrical wiring and plumbing is down 55 percent this year and headed for its first annual decline since 2001. Stockpiles monitored by the London exchange are at their highest since February 2004.
The dollar last traded at $1.4432 to the euro. It traded near a 13-year low versus the yen and a two-month low against Australian dollar.
March-delivery copper on the Shanghai Futures Exchange slid 1.7 percent to 23,310 yuan ($3,411) a ton.
Among other LME-traded metals, aluminum was down 0.7 percent at $1,500 a ton and zinc was unchanged at $1,100.
China, the world’s largest producer of aluminum, will keep export duties on the metal and its alloys unchanged next year, according to the Ministry of Finance. Export tax on shipments of primary aluminum with purity of less than 99.95 percent will remain at 15 percent, the ministry said today.
To contact the reporter for this story: Li Xiaowei in Shanghai at xli12@bloomberg.net
