By Anna Stablum July 6 (Bloomberg) -- Copper rose for a third day in London as the dollar weakened and inventories of metal continued to shrink, signaling steady demand. The U.S. Dollar Index, a six-currency gauge of the greenback’s strength, fell as much as 0.5 percent. Stockpiles tracked by the London Metal Exchange declined for a 13th day today to a seven-month low. Bookings to remove copper from LME warehouses, which last week reached the highest level in almost four months, increased. “Metals are rising in line with the weaker dollar,” said Randy North, a trader at RBC Capital Markets in London. Copper for delivery in three months added $103, or 1.6 percent, to $6,572 a metric ton at 9:46 a.m. on the LME. Futures for September delivery climbed 2 percent to $2.973 a pound on the Comex in New York. All of the six main metals traded on the LME advanced, led by zinc. Copper has gained 0.9 percent this month in London after three monthly declines in a row. Prices have slumped on a rising dollar and concern that the global economic rebound might weaken because of Europe’s fiscal crisis and steps by China’s government intended to slow the local economy. “While we believe that the copper market still faces some downward pressure, as economic conditions are likely to continue to erode, we expect that considerable buying support could emerge at the $5,500-$6,000 level,” Daniel Brebner, an analyst at Deutsche Bank AG in London, said in a report today. “We believe that the market already reflects many of the concerns highlighted.” Deutsche Bank Forecast Copper for immediate delivery will average $6,744 a ton this year, rising to $7,714 next year, according to Brebner. That compares with an average of $7,114 so far this year, according to data compiled by Bloomberg. A stronger dollar makes metals priced in the U.S. currency more expensive in terms of other monies. LME copper has shed 11 percent this year as the dollar index advanced 8 percent. A report today is expected to show that service industries in the U.S. expanded in June at a slower pace, indicating the economy started to cool entering the second half, economists said. The country is the world’s second-largest copper consumer after China. LME copper stockpiles fell 0.6 percent to 441,700 tons, the lowest level since Dec. 1. Canceled warrants, as the bookings are known, rose 2.7 percent to 34,225 tons. Aluminum for three-month delivery on the LME advanced 1.5 percent to $1,965 a ton and lead rose 1.3 percent to $1,788 a ton. Nickel gained 2 percent to $19,048 a ton, zinc climbed 2.4 percent to $1,850 a ton and tin rose 0.4 percent to $17,400 a ton. --With assistance from Shobhana Chandra in Washington. Editors: Dan Weeks, Alastair Reed. To contact the reporter on the story: Anna Stablum in London at astablum@bloomberg.net. To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net.

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