BLBG:Copper Reaches Three-Week High on Outlook for Further Stimulus
Copper reached a three-week high in London on speculation central banks will keep acting to stoke economic growth in China and the U.S., the world’s two biggest consumers of the metal.
China may soften its stance on monetary policy, Nomura International (HK) Ltd. said, after Premier Li Keqiang said growth must stay above a certain floor. The nation’s economy slowed for eight of the last nine quarters. Policy needs to remain very stimulative “for the foreseeable future” in the U.S., Federal Reserve Chairman Ben Bernanke said yesterday.
“That is a very clear steer that the weakness in Chinese growth will not be tolerated,” Nic Brown, head of commodities research at Natixis SA in London, said by phone today. “In combination with the comments from Bernanke, that really supercharged prices.”
Copper for delivery in three months added 2.6 percent to $7,005 a metric ton by 11:13 a.m. on the London Metal Exchange. Prices rose for a third session in four and touched $7,049.25, the highest since June 18, while zinc reached the highest level in almost five weeks. Copper for delivery in September gained 2.9 percent to $3.1805 a pound on the Comex in New York.
Still, copper slid 12 percent this year on the LME as inventories of the metal tracked by the exchange more than doubled. Production of refined copper will exceed demand by 162,000 tons this year, according to Barclays Plc.
“We would not get comfortable with the rebound,” William Adams, an analyst at Fastmarkets.com in London, said by e-mail yesterday. “A supply surplus is with us, stocks are high, warehouse queues may decline, and a tapering of QE may well hit emerging-markets GDP,” he said, referring to the Fed’s buying of $85 billion of debt a month, or quantitative easing.
LME copper stockpiles fell for a fifth session to 645,175 tons, daily exchange figures showed. Orders to remove the metal from warehouses dropped for a 10th session, the longest streak of declines since December, to 341,225 tons.
Zinc for three-month delivery on the LME touched $1,922.50 a ton, the highest since June 7. Aluminum, lead, nickel and tin climbed.
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
