Copper futures rose after orders to remove supplies from warehouses jumped the most in four months and inventories extended the longest decline since 2009.
The orders to take copper from London Metal Exchange depots rose 12 percent, the most since June 20. Today, Federal Reserve policy makers begin a two-day meeting amid speculation they will maintain economic stimulus in the U.S., the world’s second-biggest copper consumer.
“Base metals, especially copper, seem comfortably underpinned by an apparently attractive combination” of declining stockpiles and warehouse orders, Michael Turek, a senior director at Newedge Group SA in New York, said in an e-mail. “Prices are tentatively making upside progress away from the trading-range confines, and are likely to gradually continue to do so.”
Copper futures for December delivery rose 0.3 percent to settle at $3.278 a pound at 1:15 p.m. on the Comex in New York. LME stockpiles dropped for the 39th straight session, the longest slump since July 2009.
In London, copper for delivery in three months added 0.1 percent to $7,200 a metric ton ($3.27 a pound). The price climbed for the fourth straight session, the longest rally this month.
The Fed probably won’t scale back its $85 billion a month in bond purchases until March, a Bloomberg survey showed.
Copper advanced as interest rates rose in China, creating an incentive to use the metal as collateral to obtain loans. The seven-day repurchase rate, a gauge of funding availability in the banking system, increased to 5 percent, the highest since July 30. The nation is the top consumer of the metal.
“Financing demand is alive and well in terms of Chinese import financing,” Gayle Berry, an analyst at Barclays Plc in London, said in a telephone interview. “Chinese demand has been stronger than anyone thought this year, but it’s not been as strong as some of the headline numbers would appear to suggest.”
Nickel advanced in London. Zinc was unchanged, while aluminum, lead and tin dropped.
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