BLBG: Copper Rises as U.S. Economic Expansion May Make Up for Slowdown in China
Copper rose for a second day, paring the first annual decline since 2008, on speculation that U.S. growth will buoy metals demand as the economy slows in China.
The U.S. expanded at a rate of 1.8 percent this year and will probably increase 2.1 percent in 2012, according to the median of 70 economist estimates compiled by Bloomberg. A private report yesterday showed more Americans than forecast signed contracts to buy previously owned homes in November. The average house uses about 400 pounds (181 kilograms) of copper in the U.S., the world’s second-biggest consumer.
Before today, prices tumbled 24 percent this year as Europe’s fiscal woes threatened global growth and demand waned in China, the top metals buyer. Copper has rebounded this quarter, climbing about 8.7 percent since Sept. 30.
If the strength of the housing market is “real and just not another head-fake, we could have a potential game-changer on our hands for the U.S. economy going into 2012,” Edward Meir, an analyst at INTL FCStone Inc. in New York, said in a report.
Copper futures for March delivery climbed 1.7 percent to $3.426 a pound at 10:58 a.m. on the Comex in New York. Prices are down 26 percent from a record $4.6575 reached in February.
A purchasing managers’ index for China was at 48.7 in December, HSBC Holdings Plc and Markit Economics said today. Readings below 50 signal contraction. The euro is headed for its first back-to-back annual decreases versus the dollar in a decade as the region’s debt crisis worsened.
‘Euro-Zone Situation’
“The euro-zone situation will probably deteriorate and continue to weigh on things,” Matthew Zeman, a strategist at Kingsview Financial in Chicago, said in a telephone interview.
On the London Metal Exchange, copper for delivery in three months rose 1.7 percent to $7,548 a metric ton ($3.43 a pound). Tin, aluminum, nickel and zinc also rose in London. Lead was little changed.
The LME Index (LMEX) of the six main metals traded on the U.K. exchange has tumbled 23 percent in 2011 after more than doubling in the previous two years. Tin led declines, dropping 30 percent. Aluminum had the smallest loss, falling 19 percent.
Comex floor trading will be closed on Jan. 2 in observance of the New Year’s holiday, and the LME also will be shut.
To contact the reporters on this story: Claudia Carpenter in London at ccarpenter2@bloomberg.net; Yi Tian in New York at ytian8@bloomberg.net
To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net
