By Anna Stablum March 25 (Bloomberg) -- Copper advanced in New York as the dollar weakened, spurring demand for the metal as an alternative investment. The euro rose against the dollar after European Central Bank President Jean-Claude Trichet said policy makers will extend emergency collateral rules beyond 2010. A weaker U.S. currency makes dollar-denominated commodities cheaper in terms of other monies. “A slight easing in the dollar is allowing a measure of buying to come into metals,” Edward Meir of MF Global Inc. said in an e-mailed report today. Copper for May delivery climbed as much as 1.95 cents, or 0.6 percent, to $3.365 a pound on the Comex in New York and was at $3.353 at 8:16 a.m. local time. Copper for three-month delivery on the London Metal Exchange increased 0.3 percent to $7,392 a metric ton. Prices are little changed this year after a weaker dollar helped them to more than double in 2009. The euro has dropped 6.7 percent against the U.S. currency in 2010, wiping out last year’s 2.5 percent advance, on concern about the ability of European nations including Greece to reduce budget deficits and repay debts. “If Europe has to turn inward and take actions to prop things up, it could trigger a risk-aversion incident in financial markets,” said Sean Corrigan, chief investment strategist at Diapason Commodities Management SA in Lausanne, Switzerland. “It could clearly affect the dollar price of commodities.” EU Summit Germany will press to end weeks of European haggling over an aid package for debt-laden Greece at an EU summit today, seeking new rules to impose fiscal discipline on countries using the euro to buttress the faltering currency. Chancellor Angela Merkel ruled out an aid decision at the meeting and called for tougher penalties on future deficit violators. Stockpiles of copper in LME-monitored warehouses fell today for a 17th day to 518,825 tons, the lowest level since Jan. 12, posting the longest streak since July. Metal booked for delivery, or canceled warrants, rose for a second day, climbing 2.1 percent to 20,775 tons. “We have seen a pickup in canceled warrants and some drawdown in stocks,” and a further increase in bookings would support prices, Corrigan said. Zinc for delivery in three months on the LME rose 1.3 percent to $2,240 a ton. Imports by China, the world’s largest consumer, may slump almost 60 percent this year as domestic production increases, said a CBI China Co. analyst. Inbound shipments of zinc, used to rust-proof steel, may decline to 278,000 tons this year from 670,000 tons in 2009, Monica Gao said at a conference in Shenzhen today. Stockpiles in China have increased to more than double the amount stored in warehouses monitored by the Shanghai Futures Exchange after output jumped, according to CBI China. Aluminum fell 0.5 percent to $2,210 a ton and lead gained 1.5 percent to $2,056 a ton. Nickel rose 1.1 percent to $22,500 a ton and tin advanced 0.4 percent to $17,595 a ton. --With assistance from Li Xiaowei in Shanghai, Yasuhiko Seki in Tokyo, James G. Neuger in Brussels, Ron Harui in Singapore and Claudia Carpenter and Keith Jenkins in London. 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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