Copper rose, ending a two-day losing streak, on speculation that declines in global stockpiles signal demand may be stabilizing for the industrial metal. Inventories monitored by the London Metal Exchange slid 1.3 percent to a five-week low of 497,625 metric tons today. LME supplies are down 9.3 percent from a five-year high on Feb. 25. Stockpiles monitored by the Shanghai Futures Exchange decreased 9.7 percent this week, to 34,735 tons. Copper is up 18 percent this year on speculation that demand will rebound. “Helping sentiment has been the across-the-board decline we are seeing in copper stocks,” Edward Meir, an MF Global Ltd. analyst in Darien, Connecticut, said today in a research note. Copper futures for May delivery gained 4 cents, or 2.5 percent, to $1.6645 a pound on the New York Mercantile Exchange’s Comex division. The price fell 1.5 percent this week. “Copper prices and inventory have a very high inverse correlation,” Gijsbert Groenewegen, a partner at Gold Arrow Capital Management in New York, said yesterday. “People really watch the inventories.” “Investors seem to have considerable faith in the long- term outlook for commodities,” Barclays Capital analysts led by Gayle Berry in London said today in a report. The Qatar Investment Authority, the Persian Gulf country’s $60 billion sovereign wealth fund, said yesterday that it plans to increase investments in commodities after volatility in financial markets subsides. The statement was a “vote of confidence” for raw materials, Barclays said. China Speculation The metal also rose today on speculation that China may boost government spending to spur expansion. The Asian country is the world’s biggest metals user. China has “adequate ammunition” to spur the economy and can add to its 4 trillion yuan ($585 billion) stimulus package at any time, Premier Wen Jiabao said today. “There’s some strength coming today from the rhetoric out of China,” said Michael Gross, an analyst at OptionSellers.com in Tampa, Florida. “China uses a lot of copper, so any more growth there is going to help demand.” Still, sagging growth in the U.S., Europe and Japan may limit price gains, Gross said. Confidence among U.S. consumers in March held near a 28-year low, reflecting mounting job losses and a deepening recession, a private report showed today. On the LME, copper for delivery in three months climbed $90, or 2.5 percent, to $3,670 a metric ton ($1.66 a pound) at 6:05 p.m. The price reached a record $8,940 on July 2. Copper prices will average $4,200 a ton next quarter, Barclays forecasts. That compares with an average of about $3,381 this year before today.

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