BLBG: Copper Adds to Longest Winning Streak in 3 Years on Asia Demand
Copper rose in London, adding to its longest monthly winning streak in three years, as falling inventories of the metal and increased industrial production in Asia suggest demand is strengthening.
Stockpiles in warehouses monitored by the London Metal Exchange shrank for a 15th day, the longest slide since February 2008. Inventories held in Singapore and South Korea were the lowest since 2005, according to data released by the exchange today. China is the world’s biggest consumer of copper.
“Chinese buying has been particularly strong this first quarter,” Leon Westgate, an analyst at Standard Bank Group Ltd. in London, said by phone. Economic data is also better than expected, he said.
Copper for delivery in three months rose $84.25, or 1.9 percent, to $4,515.25 a metric ton by 12:53 p.m. in London. The contract rose 10 percent in April for a fourth straight monthly gain, the longest winning streak since January 2006.
The Shanghai market is closed today for Labor Day and the LME will be closed on May 4.
“Conditions are very quiet today, as a holiday in parts of Europe and Asia has thinned out participation,” Edward Meir, an analyst at MF Global Ltd. in Darien, Connecticut, wrote in a report. Falling inventories and a weaker dollar are enough to push copper prices higher, he said.
The Dollar Index, a gauge of value against six major currencies, fell 0.2 percent today, with dollar-denominated metals cheaper for holders of euros and pounds.
‘Slow Process’
LME-monitored inventories fell 1.7 percent to 398,700 tons, the lowest since Jan. 19. Japan’s industrial output rose for the first time in six months, the Trade Ministry said yesterday. South Korea’s factory production also unexpectedly increased for a third month in March, the country’s statistics office said.
U.S. manufacturing data today may show industry contracted in April at the slowest pace in six months, according to the median forecast of 66 economists surveyed by Bloomberg.
“We are seeing more confidence coming back into the market, but it is a very slow process,” Mike Frawley, global head of metals at Newedge Group, said by phone from New York late yesterday. Prices will be little changed for the remainder of the year, he said. Copper has gained 47 percent so far.
Among other metals for delivery in three months, aluminum gained $25, or 1.7 percent, to $1,519 a ton. Stockpiles in LME- monitored warehouses rose 0.2 percent to a record 3.79 million tons. Aluminum has fallen 1.4 percent this year, after retreating 36 percent in 2008.
Zinc rose 3.2 percent to $1,470 a ton and lead gained 1.4 percent to $1,348.50. Tin rose 1.6 percent to $12,550, after touching an intraday high of $12,650 the highest since Dec. 1.
