Copper rose for a second day in London on speculation demand will improve in China, the biggest global consumer of the metal.
Chinese growth will slowly accelerate in the year’s second half after a “lower point” this quarter, said Zhu Baoliang, chief economist at the State Information Center’s forecast department. Chinese copper demand may gain more than 8 percent annually in the next five years, Andrew Harding, head of Rio Tinto Group’s copper unit, said yesterday in an interview.
“Concerns over slowing growth for the world’s largest copper user have probably been overdone,” Andrey Kryuchenkov, a London-based analyst at VTB Capital, wrote in a report today. “Beijing is simply seeking to sustain stable growth rates while curbing the recent excess property speculation.”
Copper for three-month delivery advanced 0.4 percent to $8,085 a metric ton by 9:27 a.m. on the London Metal Exchange. Prices reached the lowest level since January last week. The July-delivery contract rose 0.3 percent to $3.6645 a pound on the Comex in New York.
“Given the pull back in copper to levels not seen since January, it is not surprising there has been some buying interest around,” William Adams, an analyst at Basemetals.com in London, wrote in a report.
Copper for immediate delivery closed yesterday at a $114 premium to three-month metal on the LME, the widest so-called backwardation since August 2008. A fee paid to borrow metal for a day rose to an 11-year high of $40 a ton yesterday before falling to $18 today. Today is the so-called prompt date by which LME rules oblige holders of contracts to advise sellers how they wish to settle the positions.
“Tightness in the spread ahead of the third Wednesday (today) also suggests there has been some aggressive short- covering and rolling forward of short positions,” Adams wrote.
Copper stockpiles monitored by the LME, down 30 percent this year, were little changed today at 261,150 tons, daily exchange figures showed.
Aluminum, nickel, lead and zinc gained in London. Tin declined.
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