BLBG: Copper Rises in Asia as Dollar Decline Boosts Investment Appeal
By Bloomberg News
March 16 (Bloomberg) -- Copper advanced in Asian trading after reaching a two-week low yesterday, as a slide in the dollar increased the appeal of raw materials as an alternative investment.
Three-month delivery metal on the London Metal Exchange gained as much as 0.8 percent to $7,362 a metric ton, and traded at $7,356 at 2:45 p.m. in Shanghai. Prices reached $7,270 yesterday, the lowest level since March 2. The June contract on the Shanghai Futures Exchange increased 0.7 percent to close at 58,800 yuan ($8,614) a ton.
Commodity prices slumped yesterday after the dollar rebounded to above 80 on an index of six major currencies, and on concern that demand from China, the world’s largest consumer, may weaken because of steps aimed at cooling economic growth.
“Metals are swinging counter to the dollar” as there’s nothing new on economic fundamentals, Chen Jian, an analyst at Minmetals Haiqin Futures Co. said from Beijing today.
The dollar index retreated 0.2 percent to 80.116 at 2:46 p.m. in Shanghai. China’s consumer prices rose to a 16-month high and new loans exceeded forecasts in February, according to data released last week, adding to the case for the central bank to raise rates.
Copper also rose after London exchange-monitored stockpiles decreased to near a two-month low yesterday and Codelco said operations were likely affected by the power cuts.
‘Unreliable Supply’
The Feb. 27 earthquake that devastated a swathe of central Chile may mean the power supply remains unreliable for some months, Energy Minister Ricardo Raineri said. Codelco’s Teniente and Andina mines are in the region that lost power after a transformer collapsed in a substation at Charrua, 431 kilometers (268 miles) south of Santiago.
Aluminum in London added 0.4 percent to $2,236 a ton and zinc rose 0.8 percent to $2,298.
Aluminum and zinc stockpiles held in China have grown to more than double the officially reported amounts by the Shanghai exchange after output increased, according to CBI China Co. Inventories of aluminum held at commercial warehouses in Shanghai, Guangdong and Jiangsu provinces were about 965,000 metric tons and those of zinc in Shanghai and Guangdong, 460,000 tons as of this month.
Lead added 0.5 percent to $2,215 a ton, nickel climbed 1 percent to $21,721, and tin rose 0.6 percent to $17,550.
--Li Xiaowei. With reporting by Rodrigo Orihuela in Santiago and Sebastian Boyd in Buenos Aires. Editors: Richard Dobson, Ravil Shirodkar.
To contact the Bloomberg News staff on this story: Li Xiaowei in Shanghai at Xli12@bloomberg.net
