BLBG: Copper Gains on Weaker Dollar, Higher Equities, Growth Outlook
June 19 (Bloomberg) -- Copper rose in London and New York, paring its first weekly drop since May, as the dollar declined, equities advanced and on optimism economies are recovering.
The U.S. Dollar Index, a gauge of the greenback’s value against six other currencies, fell as much as 0.3 percent. The MSCI World Index, a gauge of equities in 23 developed nations, rose for a second day. European Union leaders said they see the first signs of “sustainable economic recovery.”
“Copper is up due to higher equities, a slightly weaker U.S. dollar and comments by European officials that the worst of the global economic slump has passed,” David Thurtell, an analyst at Citigroup Inc. in London, said by phone.
Copper for delivery in three months rose $58, or 1.2 percent, to $5,028 a metric ton at 1:53 p.m. on the London Metal Exchange. Futures for July rose 0.6 percent to $2.296 a pound on the New York Mercantile Exchange’s Comex division.
LME copper is down 4 percent this week after inventories of copper in Shanghai expanded to the highest since August 2007. China’s State Reserve Bureau has probably finished stockpiling copper, a trader at Zhejiang Honglei Copper Co. said today.
Chinese stockpiling has contributed to a 64 percent advance in London prices this year, amid the worst global recession since World War II. China accounted for 38 percent of global copper demand in the first quarter, up from 27 percent a year ago, Barclays Capital estimates. China’s copper imports climbed for a fourth month to a record in May.
Canceled Warrants
LME canceled warrants in copper, reflecting metal earmarked for delivery out of warehouses, have declined for 10 consecutive days. Still, inventories in warehouses monitored by the bourse have shrunk 17 percent this year, the only drop among stockpiles of the main industrial metals traded on the exchange.
Among other LME metals for three-month delivery, aluminum rose 1.7 percent to $1,670 a ton. Stockpiles monitored by the LME fell by 2,850 tons today, after rising 88 percent this year to a record 4.4 million tons.
“We see risks for a sharp move up in aluminum prices in the short term,” Gayle Berry, an analyst at Barclays Capital in London, said in a report. “A large volume of LME aluminum stocks are tied up in financing deals, which could potentially lead to some panic buying.”
Aluminum is up 8.4 percent this year on the LME after dropping 36 percent in 2008 and 14 percent in 2007.
Lead gained 2 percent to $1,708 a ton and zinc gained 1.6 percent to $1,587.5 a ton. Tin fell 0.3 percent to $14,900 a ton, while nickel rose 0.9 percent to $15,150 a ton.
