Copper Gains in New York as Stockpile Orders Increase the Most Since June
Copper prices rose, the second advance in three sessions, as a decline in the dollar spurred demand for commodities as alternative assets.
The greenback dropped as much as 0.9 percent against a basket of six currencies. Some traders buy raw materials to protect purchasing power as the U.S. currency falls. Copper also gained as inventories monitored by the London Metal Exchange dropped, bringing this year’s decline to 19 percent.
“A lot of the metals are going up today based on the weakness in the dollar,” said Donald Selkin, the chief market strategist at National Securities Corp. in New York. “You also have stockpiles that continue to decline, so that’s providing some support.”
Copper futures for December delivery rose 2.8 cents, or 0.9 percent, to close at $3.3005 a pound at 1:31 p.m. on the Comex in New York.
LME-monitored stockpiles dropped 0.5 percent today to 406,700 metric tons, exchange data show. Canceled warrants, or orders to draw metal from the inventory, jumped 20 percent, the most since June 8, signaling demand may increase.
Copper dropped 2.1 percent last week on signs the global economy is slowing.
Slower Growth
In the last quarter, Japan’s economy grew at less than a fifth of the pace economists had estimated, pushing it into third place, behind the U.S. and China, a report showed today.
“The current softness in economic data, combined with increasingly mixed signals from underlying commodity markets, is likely to continue to generate choppy commodity-price action in the near term,” Goldman Sachs Group Inc. said in an Aug. 13 report.
Still, “high and rising emerging-market demand levels against limited supply growth in key commodities are likely to increasingly tighten balances,” Goldman Sachs analysts wrote. Copper and zinc have the most “upside” into the end of the year, according to the bank.
On the LME, copper for delivery in three months rose $94, or 1.3 percent, to $7,250 a ton ($3.29 a pound).
The metal may exceed $10,000 a ton in two to three years because of a “structural supply deficit,” Credit Suisse Group AG said today in a report. LME prices advanced to a record $8,940 in July 2008.
“Stocks have continued to fall, while new mine supply looks scarce,” Credit Suisse analysts led by London-based Michael Shillaker said in the report.
Also on the LME, aluminum, zinc, lead, tin and nickel prices climbed.
To contact the reporters on the story: Anna Stablum in London at astablum@bloomberg.net; Millie Munshi in New York at mmunshi@bloomberg.net.
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