BLBG: Copper Climbs as Inflation Slows Down in China, World’s Biggest Consumer
Copper rose in New York, trimming a weekly decline, on speculation top global consumer China may take more steps to stoke growth after inflation slowed and industrial production climbed less than forecast.
Consumer prices gained 4.2 percent from a year earlier, a 14-month low, and the 12.4 percent increase in output was below the median estimate of 12.6 percent in a Bloomberg News survey. Copper also advanced after European leaders added 200 billion euros ($267 billion) to their crisis-fighting warchest and tightened anti-deficit rules.
Slower inflation “means the Chinese government can afford to continue its monetary easing program,” Angus Staines, an analyst at UBS AG in London, said by phone. “It should support the restocking of copper inventories following the large destock. It’s certainly positive for copper heading into the new year.”
Copper for March delivery increased 1.2 percent to $3.543 a pound by 7:42 a.m. on the Comex in New York. Prices are down 1.2 percent this week, on course for a fifth retreat in six. Copper for three-month delivery rose 1.3 percent to $7,808 a metric ton on the London Metal Exchange.
In an accord hailed by the European Central Bank, leaders in Europe outlined a “fiscal compact” to prevent future debt runups, accelerated the start of a planned 500 billion-euro rescue fund and dropped bondholder loss-sharing provisions.
The additional funding to fight the sovereign-debt crisis is “a step in the right direction,” said Robert Montefusco, a trader at Sucden Financial Ltd. in London. Still, investors have “all eyes on Europe,” he said.
Dollar Slumps
Prices also climbed as the dollar weakened, making metals priced in the currency cheaper in terms of other monies. The U.S. Dollar Index, a six-currency gauge of the greenback’s strength, erased a gain and fell as much as 0.5 percent.
Copper stockpiles monitored by the LME fell 0.3 percent to 386,075 tons, capping a 10th weekly drop. Inventories in Asian warehouses, down 10 percent this month, shrank for a 21st week in 22. Orders to draw copper from LME stocks, or canceled warrants, declined 7.4 percent to 22,900 tons.
Aluminum, lead, nickel, zinc and tin rose in London.
To contact the reporter on this story: Agnieszka Troszkiewicz in London at atroszkiewic@bloomberg.net
To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net
