Copper futures jumped by the exchange-imposed daily limit in Shanghai, heading for the best week in more than 2-1/2 years, on speculation of output cuts and increased state buying in the world’s largest consumer. Tongling Nonferrous Metals Group Co., China’s largest copper smelter, may cut production to reduce inventories, said Liu Biyuan, an analyst at GF Futures Co. A Tongling executive denied any knowledge of output cuts when contacted by phone. “There is also renewed talk of the State Reserve Bureau making purchases to help local producers,” said Liu said by phone from Guangzhou. “With so much uncertainty about demand going forward, such rumors tend to be exaggerated and unfortunately prices react in a similar manner.” Copper for March delivery on the Shanghai Futures Exchange rose 5 percent from the previous settlement price to 27,280 yuan ($3,992) a metric ton. The metal is up 15 percent this week, the largest weekly gain since May 2006. “The company hasn’t decided this year’s production plan yet,” said Wu Guozhong, Tongling’s company secretary. “I am not aware of any production cut,” he said. China will purchase 290,000 tons of aluminum from domestic smelters to boost state reserves and stabilize prices by the end of January, raising speculation it will buy other metals too, industry executives said Dec. 25. “There’s actually no reason to reduce output unless the smelter is undergoing maintenance,” said Pang Ying, analyst at Shenzhen Rongtuo Trading Co. “Domestic copper smelters are not losing money at the moment.” London Metal Exchange copper gained as much as 8 percent to $3,449.75 a ton, and traded at $3,360 a ton at 11:41 a.m. in Singapore. March-delivery copper on the Comex division of the New York Mercantile Exchange rose 3.3 percent to $1.5270 a pound. Among other LME-traded metals, aluminum rose 1.6 percent to $1,580 a ton, zinc added 2.6 percent to $1,267, lead gained 1 percent to $1,160, and nickel was up 1.3 percent at $11,690 as of 10:32 a.m. in Singapore.

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