By Glenys Sim May 26 (Bloomberg) -- Copper gained, pacing an advance in industrial metals, as equities and commodities rebounded on speculation that the recent slump in financial markets was excessive given the outlook for demand. Three-month copper on the London Metal Exchange advanced as much as 1.8 percent to $6,848 a metric ton, and was at $6,846 at 3:52 p.m. in Singapore. Futures in Shanghai rose as much as 1.7 percent to 55,060 yuan ($8,063) a ton before ending the day at 54,890 yuan. Rio Tinto Group, the world’s third-biggest mining company, expects China’s demand for iron ore, copper, coal and aluminum to increase over the next 15 years, after which time India demand is expect to pick up, Chairman Jan du Plessis said today at the company’s annual meeting in Melbourne. “In the short term, what’s happening in Europe is going to weigh on sentiment and with the onset of the slow demand period, we could see Shanghai prices below 50,000 yuan,” Shen Xiaoqiang, senior analyst at Donghai Futures Co., said from Suzhou. Demand for copper in China, the world’s largest metals user, may gain as much as 12 percent this year to 8.96 million tons, according to a unit of Wanxiang Group, the country’s biggest auto-parts maker. “Further out, the fundamentals remain healthy as China’s demand continues to grow,” said Shen. U.S. stocks erased losses in the final minutes of trading yesterday after dropping as much as 3.1 percent. That helped the euro to pare declines against the dollar even as concerns about Europe’s fiscal crisis persist. Asian stocks climbed today after dropping to a 10-month low. Volatility Continues “Volatility will continue as long as uncertainties remain” with Europe’s debt crisis and military tensions on the Korean peninsula, according to Tian Lianfeng, an analyst at Zheshang Futures Co. “Fundamentally, in this economic environment, Shanghai copper should be at 48,000 yuan because stockpiles and imports are still so high,” Tian said from Zhejiang today. “Demand in China is quite good currently but it’s not enough to mop up the excess supplies in the market.” China’s imports of refined copper were 1.06 million tons in the first four months of this year, according to customs data, little changed from last year when state stockpiling and stimulus spending drove purchases. Inventories tallied by the Shanghai Futures Exchange have climbed 76 percent this year. Aluminum in London advanced 1.5 percent to $2,048 a ton, zinc gained 3.5 percent to $1,920.50 a ton, and lead climbed 3.1 percent to $1,799.50 a ton. Nickel advanced 1.8 percent to $21,575 a ton, and tin added 0.6 percent to $17,700 a ton. --Editor: Jake Lloyd-Smith To contact the reporter for this story: Glenys Sim in Singapore at gsim4@bloomberg.net To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net

Source