Copper advanced to a three-week high in London on optimism for U.S. economic growth, supporting demand for industrial metals. Federal Reserve Chairman Ben S. Bernanke said last week that the U.S. economy is gradually recovering and that he has the tools to spur growth, boosting demand prospects for the metal. Consumer spending in the U.S. climbed more than forecast in July, showing the biggest part of the economy is holding up. The country is the largest consumer of copper after China. “This week has started with some muted optimism,” Christin Tuxen, an analyst at Danske Bank A/S in Copenhagen, said by phone today. “It seems that the Fed is committed to implement new stimuli, which is something that most of the commodity markets are quite happy about.” Copper for delivery in three months gained $63, or 0.7 percent, to $9,138 a metric ton by 11:41 a.m. on the London Metal Exchange after trading at $9,175, the highest since Aug. 5. The market was closed yesterday for holiday. Copper for December delivery rose 3.4 cents, or 0.8 percent, to $4.1435 a pound on Comex in New York after falling 0.2 percent yesterday. U.S. personal spending rose 0.8 percent, the biggest gain since February, after a 0.1 percent decline the prior month, Commerce Department figures showed yesterday in Washington. The MSCI World (MXWO) Index of shares gained for a third session, rising as much as 0.6 percent today. Grasberg Mine Copper was also helped by speculation that workers at Freeport-McMoRan Copper & Gold Inc. (FCX)’s Grasberg mine may strike after talks on wages ended with no agreement. The strike may be called after this week’s holiday marking the end of Ramadan, Virgo Solossa, head of organizational affairs at PT Freeport Indonesia’s labor union, said Aug. 26. The Grasberg mine in Indonesia has the world’s largest recoverable reserves of copper and the biggest gold deposit, according to Freeport’s website. World copper demand is set to exceed output by 377,000 tons this year, according to the International Copper Study Group. “Given the tightness in the market that is always something that adds some sort of support,” Tuxen said. “But at least for now, it is the overall financial macro picture that is driving most of the base metals.” Copper inventories monitored by the LME fell 550 tons to 464,375 tons, exchange data showed today. Stockpiles tracked by the Shanghai Futures Exchange dropped 8.7 percent to 102,258 tons last week, the bourse said Aug. 26. Aluminum for three-month delivery on the LME advanced 0.7 percent to $2,395.25 a ton, zinc rose 1.7 percent to $2,285.50 a ton, and lead gained 0.4 percent to $2,496 a ton. Nickel climbed 2 percent to $21,880 a ton and tin gained 1.3 percent to $24,111 a ton. To contact the reporter on this story: Agnieszka Troszkiewicz in London at atroszkiewic@bloomberg.net To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net

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