BLBG:Copper Rises as China Company Profits Fuel Stimulus Speculation
Copper, on course for a quarterly gain, rose in London on speculation sliding profits for industrial companies will spur stimulus measures in China, the world’s largest consumer of the metal.
Industrial companies’ profits dropped 6.2 percent from a year earlier in August, falling for a fifth month, China’s statistics bureau said today. Copper is headed for the biggest monthly advance since January after China approved spending on infrastructure projects from railroads to waterway improvements.
“Data out today showing the Chinese slowdown is hurting company profits prompted belief of further stimulus from Beijing,” Jason Dobson, a director of metals for Asia at ICAP Plc in Hong Kong, said in a report.
Copper for delivery in three months added 0.6 percent to $8,170 a metric ton by 9:33 a.m. on the London Metal Exchange. Prices are up 6.3 percent for the quarter and 7.3 percent this month. Copper for December delivery rose 0.4 percent to $3.726 a pound on the Comex in New York.
Chinese markets will be closed next week for National Day holidays, and the nation’s Communist Party is likely to convene in a few weeks for the congress held once every five years to complete the leadership change.
“The market is likely to still get ongoing support from a pickup in China’s infrastructure spending,” William Adams, an analyst at Fastmarkets.com in London, said by e-mail yesterday.
Gains may be limited by concern about the euro-region debt crisis that threatens to crimp growth and metals demand. Spanish protesters marched for a second night in Madrid, calling on the government to reverse austerity measures. Police used tear gas to disperse demonstrators in Athens yesterday.
Copper stockpiles monitored by the LME fell for the first time this week to 220,075 tons, daily exchange figures showed. Orders to remove the metal from warehouses rose 1.1 percent to 39,875 on bookings in New Orleans, where they have surged more than 12-fold this month.
Aluminum, nickel, zinc, tin and lead rose in London.
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
