July 19 (Bloomberg) -- Copper rose in New York from the lowest price in almost two weeks as inventories shrank further, matching this year’s longest streak of declines. Stockpiles of copper in warehouses monitored by the London Metal Exchange declined for a 22nd day today, equaling a run that ended on April 1. Inventories are down 16 percent this year and on course for the first annual drop since 2004. Prices also gained as the dollar dropped for a fifth day before rebounding. “Dollar weakness and falling exchange stocks are helping support copper prices,” said Randy North, a trader at RBC Capital Markets in London. Futures for September delivery rose 1.95 cents, or 0.7 percent, to $2.949 a pound at 7:54 a.m. on the Comex in New York. The most-active contract erased a drop as low as $2.925, the lowest intraday price since July 6. Copper for delivery in three months added 0.6 percent to $6,525 a metric ton on the LME. London copper trades at a discount to Asian prices after last week’s 4.1 percent retreat, compared with the 0.8 percent slip by the October contract on the Shanghai Futures Exchange. So-called arbitrage traders profit from buying the metal in London and selling it in Shanghai to take advantage of the price disparity. ‘Arbitrage Window’ “Copper rose overnight as an open arbitrage window saw trade buyers in the market buying LME copper,” North said. Prices have slid 12 percent this year on the LME, pulled down by a stronger dollar and concern that Europe’s sovereign- debt crisis may hamper economies, crimping usage of metals. Gains by the dollar make metals priced in the currency more expensive in terms of other monies. The U.S. Dollar Index, a six-currency gauge of the greenback’s strength, has climbed 5.9 percent this year. It slipped as much as 0.2 percent today and was last little changed. The European crisis has spurred credit-rating companies to lower ratings for indebted euro-zone countries including Greece on concern they will struggle to cut budget deficits to within European Union limits. Moody’s Investors Service today lowered Ireland’s rating by one level to Aa2, citing a “loss of financial strength” and the cost of bank bailouts. Copper also has dropped on concern about steps by China, the world’s top consumer, to rein its overheated economy. Figures showed last week that Chinese economic expansion slowed to 10.3 percent in the second quarter and industrial production cooled more than forecast in June. Barclays Recommendation “A slowing in momentum of growth does not mean that the global economy is heading toward imminent disaster, and in some economies it is a welcome sign to avoid overheating,” Barclays Capital analysts led by Gayle Berry in London said in a report. “We would recommend buying copper on dips toward $6,000 a ton.” Codelco yesterday stopped mining activity at its Norte division in Chile because of high winds, a company official said. The company continues to process copper concentrate, and it plans to resume mining at its Norte mines today, he said. Chile is the world’s biggest copper-producing nation, and Codelco is the industry output leader. LME inventories of the metal fell to 422,850 tons, the lowest level since Nov. 20. Bookings to remove metal from LME warehouses dropped after three gains in a row, declining 4.1 percent to 31,275 tons. Immediate-delivery copper’s discount to the three-month price, the so-called contango, narrowed to $12.50 today, the lowest level since Sept. 30 and down from $21 a week ago. Aluminum for three-month delivery on the LME slipped 0.2 percent to $1,974 a ton, lead climbed 0.1 percent to $1,772 a ton and nickel was unchanged at $18,950 a ton. Zinc gained 0.6 percent to $1,806.75 a ton and tin added 0.6 percent to $17,850 a ton. --With assistance from Glenys Sim in Singapore, Louisa Fahy in Dublin and Matt Craze in Santiago. Editors: Dan Weeks, John Deane. To contact the reporter on the story: Anna Stablum in London at astablum@bloomberg.net. To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net.

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