Copper prices increased for the third straight day on speculation that resilient growth in China, the world’s biggest metals buyer, will buoy demand even as the U.S. economy slows.
Inventories tracked by the London Metal Exchange fell today to the lowest level since Nov. 12, signaling consumption is unabated. Hedge-fund managers and other large speculator have raised bets on price gains for three straight weeks, according to data from the U.S. Commodity Futures Trading Commission.
“Funds are reestablishing long positions,” said Michael Gross, an analyst at OptionSellers.com in Tampa, Florida. “China is a big, huge copper market, and it seems like, at least for the time being, traders are shrugging off U.S. weakness and looking to the markets there.”
Copper futures for December delivery added 1.2 cents, or 0.4 percent, to close at $3.3705 a pound at 1:21 p.m. on the Comex in New York. The metal gained 2.6 percent in the previous two sessions, boosted by a weaker dollar.
Copper has dropped 6 percent since April 1 on concern that demand was flagging.
“Copper is very economically sensitive,” said Adam Klopfenstein, a senior market strategist at Lind-Waldock, a brokerage in Chicago. “Investors are still questioning what the outlook is going to be.”
On the LME, copper futures for delivery in three months added $8, or 0.1 percent, to $7,390 a metric ton ($3.35 a pound).
“Despite the backdrop of falling LME stocks,” copper prices will continue to meet “resistance” at prices higher than $7,500, Edward Meir, an analyst at MF Global Ltd. in Darien, Connecticut, said in a report today.
Also on the LME, aluminum, lead, nickel and tin prices dropped, while zinc gained.