Copper rebounded from the lowest price since August after Morgan Stanley predicted increased demand in China, the world’s biggest user.
Supply-chain inventories of copper are low in China as manufacturers order more of the metal, the bank said in a report dated yesterday. Copper and nickel led gains for metals today as investors speculated that the European Central Bank will continue to support Cyprus, helping to allay concern that the region’s debt turmoil will erode economic growth.
“Major copper end-demand market indicators, like air-conditioner sales and state-grid-equipment orders, are all improving, while copper inventories at downstream producers remain low,” Rachel Zhang, an Hong Kong-based analyst at Morgan Stanley, wrote in a report. “We believe restocking will be evident in the next couple of months.”
Copper futures for delivery in May advanced 1.2 percent to settle at $3.4465 a pound at 1:13 p.m. on the Comex in New York, the biggest gain since Feb. 1. Prices yesterday slid to $3.388, the lowest for a most-active contract since Aug. 21.
China has increased wind-farm approvals, the National Energy Administration said yesterday. The Copper Development Association says the generator in a 5-megawatt wind turbine needs 3.4 metric tons of the metal to convert the wind’s energy to electricity.
Rising supplies may hold copper in check. Prices on average will slip 2 percent this year as stockpiles expand, an Australian government forecaster said.
Inventories tracked by the London Metal Exchange climbed for a 25th session to 550,825 tons, daily exchange figures showed. Orders to remove the metal from warehouses surged 77 percent, the most since December 2011, to 64,675 tons on bookings in Antwerp, Belgium.
On the LME, copper for delivery in three months rose 1.2 percent to $7,620 a ton ($3.46 a pound).
Aluminum, nickel, lead and zinc also gained in London. Tin declined.