Aug. 31 (Bloomberg) -- Copper futures in Shanghai rose after London Metal Exchange inventories had their biggest one- day decline in a month, signaling demand for the metal may be outpacing supply.

Stockpiles monitored by the exchange fell 675 metric tons, or 1 percent, to 64,250 tons, the biggest drop since July 27, the LME said yesterday. Shanghai Futures Exchange inventories last week had their first decline in a month, leaving stockpiles worldwide at their lowest since Aug. 18.

``The falling stockpiles were against some expectations, helping prices,'' said Yuan Fang, a metals trader at Shanghai Oriental Futures Co. ``Bullish commodity funds are looking for some substantial evidence to suggest that China's copper demand is picking up as summer ends.''

Copper for delivery in November rose as much as 210 yuan, or 0.6 percent, to 34,980 yuan ($4,320) a metric ton on the Shanghai Futures Exchange, reversing a decline yesterday. The contract traded at 34,920 yuan at 9:30 a.m. local time.

Shanghai copper touched 35,270 yuan on Aug. 17, the highest for the most active contract since trading began 12 years ago.

Copper prices in Shanghai have risen 20 percent this year as China's surging demand combined with disruptions and stoppages at producers such as Asarco LLC. London Metal Exchange stockpiles reached a 31-year low on July 22. Copper for delivery in three months rose to a record $3,670 on the LME on Aug. 16.

Today, copper for delivery in three months was bid at $3,641 a ton and offered at $3,646 at 9:25 a.m. Shanghai time on the LME. It rose 1 percent to close at $3,647 a ton yesterday.

Copper for December delivery on the Comex division of the New York Mercantile Exchange was unchanged at $1.6470 a pound at 9:15 a.m. Shanghai time in after-hours trading.

To contact the reporter for this story: Helen Yuan in Shanghai at hyuan@bloomberg.net

Last Updated: August 30, 2005 22:43 EDT