Feb. 13 (Bloomberg) -- Copper rose for a second day on speculation a recovery in demand from top users China and the U.S. will help absorb an oversupply. Zinc gained and traded close to the highest since 2011.
The metal for delivery in three months gained as much as 0.3 percent to $8,262.25 a metric ton on the London Metal Exchange, after closing 0.5 percent higher yesterday. The contract traded at $8,2447 a ton as of 3:19 p.m. in Singapore. Futures for March delivery rose 0.1 percent at $3.7465 a pound on the Comex in New York.
The Standard & Poor’s 500 Index climbed 6.5 percent this year through yesterday as about 74 percent of the 354 companies in the equity gauge that have released results during the earnings season exceeded profit projections, data compiled by Bloomberg show. A government-backed survey of purchasing managers showed manufacturing in China expanded in January, and a separate gauge from HSBC Holdings Plc and Markit Economics rose to the highest in two years, signaling the recovery may be gaining momentum.
“Copper will benefit from the macro-economic recovery in the major consuming countries,” Daniel Hynes, head of commodity strategy at CIMB Securities Australia Ltd., said today by phone from Sydney.
Oz Minerals Ltd., Australia’s third biggest copper producer, will extend the life of its Ankata mine by two years to 2019, and forecast “robust” demand for the metal from China and the U.S. that Chief Executive Officer Terry Burgess said would boost prices to the higher end the $3 to $4 a pound range this year.
Copper stockpiles monitored by the LME, the Shanghai Futures Exchange and Comex gained to 664,396 tons as of yesterday, the highest since May 2011 and almost a 13 percent climb in the year to date, according to data compiled by Bloomberg. While the market may see the first annual oversupply since 2009, an expected demand increase in China and the U.S. will help absorb the glut, Hynes said.
Financial markets are closed this week in China for the Lunar New Year holiday. Copper imports by China advanced 2.9 percent last month from December.
Zinc rose as much as 0.4 percent to $2,219.25. The contract reached $2,223.25 a ton yesterday, the highest since Sept. 9, 2011. The metal is rallying on expectations that it will move from an oversupply to a deficit of 100,000 tons for 2014, Nick Trevethan, senior commodities strategist at Australia & New Zealand Banking Group Ltd., said today in Singapore.
Zinc, used to galvanize steel, may be in an oversupply of 190,000 tons this year, smaller than 308,000 tons in 2012, according to an ANZ forecast.
Lead on the LME for three-month delivery added 0.6 percent at $2,429.50 a ton, aluminum gained 0.1 percent to $2,122 a ton and nickel was little changed at $18,378 a ton.
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