By Anna Stablum March 19 (Bloomberg) -- Copper rose in London, heading for a weekly gain, on speculation that shrinking inventories indicate revived demand. Stockpiles monitored by the London Metal Exchange fell for a 13th day to the lowest level in more than two months. They declined for a fourth week in a row. “LME inventories are down, so prices are up,” Marc Elliott, an analyst at Fairfax IS in London, said today by telephone. “If inventories are going down, that signals stronger demand.” Copper for delivery in three months rose as much as $64, or 0.9 percent, to $7,550 a metric ton on the LME. The contract was at $7,510 at 9:51 a.m. local time, for a weekly climb of 0.9 percent. Copper for May delivery advanced 0.4 percent to $3.4085 a pound on the Comex in New York. “We are looking for further upside to prices over coming months,” Gayle Berry, an analyst at Barclays Capital in London, said in a monthly report. Still, “the magnitude of gains is likely to be tempered by recurring concerns over how China will tackle rising inflation,” she said. LME copper slid to a two-week low of $7,270 a ton on March 15 on concern that interest rates might rise in China, where inflation climbed to a 16-month high in February. Prices doubled last year as copper imports into the Asian nation increased to a record in the first half. Biggest Consumer “The markets are rightly concerned that growth, and therefore demand, will slow in the world’s largest metals consumer, which for most of the past year has been the only source of strength,” Berry said. Chinese demand probably will “continue to bloom” for this year’s first half, though a slowdown after that “is one of the biggest risks to fundamentals and prices,” she said. Stockpiles of copper in LME-monitored warehouses fell 0.2 percent to 522,975 tons, the lowest level since Jan. 13. Metal booked for removal from inventories rose 1.8 percent to 21,825 tons. Stockpiles in Shanghai rose to 169,101 tons in the week ended today, the Shanghai Futures Exchange said on its Web site today. Nickel for three-month delivery on the LME rose 0.2 percent to $22,806 a ton, extending this year’s gain to 23 percent, the biggest among the six main metals. Prices may drop in the second quarter on concern that demand will rise too slowly to drain stockpiles, a survey of analysts showed. Prices will average $20,944 a ton in the next quarter, according to the median in a Bloomberg survey of 13 analysts. Zinc was unchanged at $2,334 a ton and aluminum shed 0.2 percent to $2,272 a ton. Tin dropped 0.3 percent to $17,750 a ton and lead gained 0.3 percent to $2,252 a ton. --Editors: Dan Weeks, Stuart Wallace. To contact the reporter on the story: Anna Stablum in London at astablum@bloomberg.net. To contact the editor responsible for this story: Stuart Wallace at swallace6@bloomberg.net.

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