Copper rose in London and New York, heading for weekly gains, as Chinese imports of the metal climbed to a record and inventories continued to drop. Stockpiles of copper in warehouses monitored by the London Metal Exchange fell for a 12th day. China increased imports of copper by 7 percent in April, customs figures showed today, as buyers replenished stockpiles needed for the country’s 4 trillion-yuan ($586 billion) stimulus program. “The strength of Chinese import demand has been pretty phenomenal,” Kevin Norrish, an analyst at Barclays Capital in London, said by phone. “We’ve seen that confirmed again in the import statistics.” Copper for three-month delivery rose $121, or 2.7 percent, to $4,591 a metric ton by 5 p.m. on the LME. The contract has gained 3.2 percent this week after dropping 5 percent last week. Copper futures for July delivery added 2.1 percent to $2.094 a pound on the New York Mercantile Exchange’s Comex division, for a weekly advance of 3.8 percent. Demand from China, the world’s largest copper consumer, has helped to send LME prices of the metal 50 percent higher this year. Some analysts view copper as a barometer of economic growth because of its use in pipes and wiring. Norrish predicted weaker Chinese import demand as the price differential between copper prices in London and Shanghai narrows. More Than Double “These markets have been dependent on Chinese restocking and scrap shortages,” he said. Inbound shipments of refined copper advanced to 317,947 tons in April and were more than double a year earlier, the Chinese figures showed. The country imported 1.07 million tons of copper in the first four months, according to customs data. Last year it imported just under 1.5 million tons, according to Macquarie Group Ltd. in London. Slowing imports into China would weigh on copper prices, Goldman Sachs Group Inc. analysts led by Peter Mallin-Jones in London said in a report today. There’s “little evidence” that demand from Western countries would “offset a Chinese pullback,” they said. Still, copper “is likely to be higher, assuming no worsening of the global economy,” on a 12-month-plus view, Goldman Sachs said. The metal is likely to be affected by capacity constraints by 2011, according to the bank, which raised its estimate for immediate-delivery copper’s average price this year to $3,749 a ton from $3,088. Aluminum Inventories Stockpiles of copper in LME-monitored warehouses fell 0.8 percent to 333,375 tons today and have dropped 18 percent in May. Shanghai copper stockpiles declined for the first time in four weeks, sliding 4.5 percent, the Shanghai Futures Exchange said on its Web site. Among other LME metals for three-month delivery, aluminum fell 0.3 percent to $1,445 a ton. LME-monitored inventories of the lightweight metal, used in industries from packaging to aerospace, rose 0.4 percent today to a record 4.19 million tons. “Prices could fall toward $1,420 to $1,400 per ton within the next three weeks,” Laredo, Texas-based researcher HARBOR Intelligence said in a report dated May 20. Goldman Sachs cut its estimate for immediate-delivery aluminum’s average price this year to $1,443 a ton from $1,470. In 2010, the bank expects the metal to average $1,545 a ton, down from $1,738 previously. Nickel gained 5.2 percent to $12,750 a ton. Chinese imports of nickel, used mostly in stainless steel, jumped 95 percent in April to 21,031 tons. “We believe fundamentals in the nickel market will start to improve by the end of the year as the market surplus declines rapidly and as the stainless steel sector enters a period of restocking,” Deutsche Bank AG said in a report today. Lead gained 3.5 percent to $1,440 a ton and zinc added 5 percent to $1,515 a ton. Tin rose 2.6 percent to $13,650 a ton.

Source