BLBG: Copper Gains for Second Day on Recovery Optimism, Stock Rally
July 14 (Bloomberg) -- Copper gained for a second day in Asia as optimism that the global economy is recovering from recession boosted commodity prices and equities.
The MSCI Asia Pacific Index rebounded from an eight-week low, tracking gains in the Standard & Poor’s 500 Index, amid speculation Goldman Sachs Group Inc. will report stronger earnings today.
“The rebound in the stock market is helping lift sentiment in commodities,” Li Jiandong, an analyst at Jingyi Futures Co., said from Beijing.
Three-month delivery copper on the London Metal Exchange climbed as much as 1.6 percent to $4,973 a metric ton and traded at $4,959 at 3:14 p.m. in Singapore, extending yesterday’s 0.8 percent advance. Copper for September delivery in New York gained 1.4 percent to $2.2550 a pound at the same time.
The “strong rebound in the world’s equities bolstered buying of copper,” HNA Topwin Futures Co. analysts led by Tan Wentao wrote in an e-mailed report today.
New Zealand Reserve Bank Governor Alan Bollard said “early signs of a global recovery have now emerged.” Separately, Singapore’s government raised its forecast for 2009 growth as the nation emerged from the deepest recession since independence in 1965, according to second-quarter data released today.
October-delivery copper on the Shanghai Futures Exchange added as much as 2.4 percent to 39,840 yuan ($5,830) a ton, ending the day at 39,700 yuan. Immediate-delivery copper in Changjiang, Shanghai’s biggest cash market, was at 40,150 yuan a ton today, 450 yuan more than the most-active futures price.
Chinese Market
“A return to backwardation in the Chinese market is also helping to support copper prices,” said Li, the analyst at Jingyi Futures.
A market is backwardated when near-term prices are higher than longer-dated contracts, suggesting higher demand in the short term. Copper stockpiles in China fell to 54,167 tons last week, down from the year’s high of 68,536 tons in June.
Among other LME-traded metals, aluminum rose 0.8 percent to $1,573 a ton, zinc added 2.5 percent to $1,476.25 a ton and lead climbed 1 percent to $1,570 a ton. Nickel gained 3 percent to $15,175 a ton, while tin was 2.9 percent higher at $12,650 a ton as of 3:24 p.m. in Singapore.
