BLBG:Copper Climbs on Speculation China, Biggest User, May Relax Credit Curbs
Copper rose in London to the highest price in almost four months on speculation China may ease credit controls as growth slows, potentially bolstering demand prospects in the largest user of the metal.
China’s banking regulator is weighing a plan to relax capital requirements for lenders, delaying implementing the most stringent capital-adequacy ratios, four people with knowledge of the matter said. Copper imports into China reached a record high and fourth-quarter economic growth in the country topped economists’ estimates, figures showed this month.
“We continue to expect both restocking and renewed strong Chinese buying post-New Year to further underpin prices into” the second quarter, Wiktor Bielski, an analyst at VTB Capital Plc in London, said in a report yesterday.
Copper for three-month delivery gained 1.7 percent to $8,376 a metric ton by 9:56 a.m. on the London Metal Exchange. Prices reached $8,410, the highest level since Sept. 20. LME stockpiles may fall to the lowest since July 2009 after orders to draw copper from inventories, or canceled warrants, rose to the highest level since May 2009.
The metal’s 14-day relative-strength index, a gauge of whether a commodity is overbought or oversold, climbed above 70, the level that signals a potential impending drop to some analysts who study technical charts. The gap between prices in London and Shanghai that spurred so-called arbitrage trading has closed for now, according to William Adams, an analyst at Basemetals.com in London.
London, Shanghai
“LME copper prices have left Shanghai copper prices behind,” Adams said by e-mail yesterday. “That suggests LME prices are running ahead of themselves.”
Copper for March delivery rose 1.5 percent to $3.809 a pound on the Comex in New York.
Concern that supply may fall short of demand has helped to support prices. The copper market will have a shortage of 363,000 tons this year, according to Barclays Capital. BHP Billiton Ltd. (BLT), the biggest mining company, said yesterday its production of the metal dropped 16 percent from a year earlier in the six months through December.
Copper inventories monitored by the LME declined for a 12th session to 351,200 tons, remaining at the lowest level since Dec. 14, 2010, daily exchange figures showed. Orders to draw the metal from inventories, or canceled warrants, advanced 6.3 percent to 69,800 tons on bookings in New Orleans and Leghorn, Italy.
Aluminum for three-month delivery on the LME rose 1 percent to $2,227 a ton and zinc gained 1.3 percent to $2,029 a ton. Lead advanced 1.3 percent to $2,166 a ton, nickel climbed 1.4 percent to $19,775 a ton and tin added 0.8 percent to $21,950 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
