Copper Advances on IMF Forecast for World Growth, Contracting Inventories
Copper rose in New York and London on an increased forecast for world economic growth from the International Monetary Fund and on a further drop in inventories of metal.
The global economy will expand 4.6 percent in 2010, the most since 2007 and above an April projection of 4.2 percent, the IMF said yesterday. Stockpiles of copper tracked by the London Metal Exchange contracted for a 15th day and the MSCI World Index of shares climbed for a third day.
“There is a little bit more optimism out there,” Marc Elliott, an analyst at Fairfax IS in London, said today by telephone.
Futures for September delivery advanced 1.55 cents, or 0.5 percent, to $3.0305 a pound at 8:23 a.m. on the Comex in New York. Copper for delivery in three months gained 0.8 percent to $6,695 a metric ton on the LME.
Prices increased as the U.S. Dollar Index, a six-currency gauge of the greenback’s strength, pared a climb of as much as 0.2 percent to trade little changed. A stronger U.S. currency makes dollar-priced metals more expensive in terms of other monies. The index has climbed 7.7 percent this year, contributing to LME copper’s 9.2 percent slide.
Chinese Demand
Prices also have dropped on concern that Europe’s debt crisis may crimp usage of metals and demand may wane in China, the world’s largest copper consumer, as the government moves to restrain the nation’s surging economy. Financial-market turmoil has increased the risks to the recovery, according to the IMF.
Global growth next year will be 4.3 percent, unchanged from its April forecast, the IMF said in revisions yesterday to its World Economic Outlook. The fund urged European Union policy makers to take further “decisive” steps to combat a sovereign- debt crisis that it said poses a threat to the world financial system.
Copper prices showed little response immediately after the European Central Bank kept its benchmark rate at 1 percent today, as predicted by all 55 economists surveyed by Bloomberg News.
Stockpiles of copper tracked by the LME slid to 439,000 tons, the lowest level since Nov. 30. Bookings to remove metal from LME warehouses dropped 7.6 percent to 32,425 tons.
Aluminum for three-month delivery on the LME rose 0.4 percent to $1,994.75 a ton and lead gained 1.9 percent to $1,829 a ton. Nickel advanced 1 percent to $19,335 a ton, zinc climbed 0.8 percent to $1,868 a ton and tin was unchanged at $17,650 a ton.
To contact the reporter on the story: Anna Stablum in London at astablum@bloomberg.net.
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