By Anna Stablum May 13 (Bloomberg) -- Copper may rise in New York and London on reduced concern about the potential spread of Greece’s fiscal crisis after Spain unveiled the biggest round of budget cuts in 30 years. Spain will lower public wages 5 percent this year in an effort to reduce its budget deficit to 6 percent of gross domestic product in 2011. Concern that the Greek crisis might widen to other euro nations helped the Reuters/Jefferies CRB Index of commodities to tumble 5.9 percent last week, the most since December 2008. “The Spanish austerity measures undoubtedly helped perception of a reduced risk of contagion,” Charles Kernot, an analyst at Evolution Securities Ltd. in London, said by phone. “We have a window of stability.” Copper for July delivery gained 0.6 cent, or 0.2 percent, to $3.194 a pound at 7:56 a.m. on the Comex in New York. Copper for delivery in three months rose 0.2 percent to $7,039.25 a metric ton on the London Metal Exchange. Spain also will freeze public wages in 2011, suspend a pension increase, scrap a subsidy for new parents and trim foreign aid, the country’s prime minister told lawmakers yesterday. The budget deficit was 11.2 percent in 2009. In addition to the Greek crisis, prices have slid this month on concern that authorities in China, the world’s biggest copper consumer, will take more steps to rein in economic growth. Inflation in the country rose the most in 18 months and new lending exceeded estimates, figures showed this week. ‘Optimistic’ on Metals “Despite all the events that have been going on in Europe, and despite the changes that are taking place in China in terms of monetary tightening, we still think the global economy will continue to recover,” Nic Brown, an analyst at Natixis Commodity Markets Ltd. in London, said by phone. “We remain constructive and optimistic on base metals.” Copper for immediate delivery will average $7,885 a ton this year, Brown said. That compares with an average so far of $7,328. Natixis is “more optimistic on copper” than on other industrial metals, he said. The economy in the 16 euro nations expanded more in the first quarter than estimated by economists, according to figures released yesterday. A report tomorrow may show that industrial output in the U.S., the second-biggest consumer of copper, sped up last month. Copper stockpiles tracked by the LME fell 0.3 percent to 485,150 tons, the 13th drop in a row. Bookings to remove metal from inventories jumped 15 percent to 19,525 tons. Tin, Lead Tin for three-month delivery on the LME fell 0.4 percent to $17,650 a ton. Open interest, or the number of contracts outstanding, dropped for a fifth day to the lowest level since October 2008. Aluminum advanced 0.8 percent to $2,138 a ton. Stockpiles in LME-monitored warehouses fell for a 14th day to the lowest level since July. Lead slipped 0.1 percent to $2,042 a ton and zinc gained 0.3 percent to $2,107 a ton. Nickel climbed 1.1 percent to $22,800 a ton. LME data as of May 11 show one party holding 30 percent to 39 percent of aluminum stockpiles. On the futures market, one party accounts for 20 percent to 29 percent of short positions, or bets on lower prices, expiring in May. There is also one holder of more than 40 percent of aluminum short positions expiring in June. The biggest bet on a price gain expiring in May accounted for between 30 percent and 39 percent, and for June the largest long position was between 10 percent and 19 percent, data from May 11 showed. To contact the reporter on the story: Anna Stablum in London at astablum@bloomberg.net.

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