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Copper Extends Third Weekly Gain on China Demand Speculation

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May 13 (Bloomberg) -- Copper extended a third weekly advance amid speculation that demand from China, the largest user, may be stronger than economic data indicate. Aluminum, lead, nickel, tin and zinc also climbed.

Copper for delivery in three months rose as much as 0.9 percent to $7,444 a metric ton on the London Metal Exchange and was at $7,409.75 at 2:27 p.m. Shanghai time. The metal gained 5.5 percent in the past three weeks.

LME copper stockpiles fell for a second week to 604,250 tons on May 10, the lowest in almost a month, as orders to remove copper from LME warehouses jumped 35 percent to a record 212,875 tons. Shanghai Futures Exchange inventories slid to a six-month low at 195,043 tons last week. China’s fixed-asset investment decelerated in April as industrial output trailed estimates, data from the statistics bureau showed today.

“While looking at the data, China’s growth continues to show weakness, some investors speculate underlying demand is improving and that will lend support to prices,” said Huang Zhen, an analyst at Dadi Futures Co.

China’s refined copper consumption may rise faster than last year, gaining 7 percent to 8.3 million tons, and production is expected to gain 8 percent to 6.3 million tons, said Duan Shaofu, deputy head of heavy metals department at the China Nonferrous Metals Industry Association.

Copper for delivery in September on the Shanghai Futures Exchange added 0.2 percent to 53,550 yuan ($8,712) a ton. Metal for delivery in July on the Comex in New York climbed 0.4 percent to $3.3665 per pound.

Net-short positions, or wagers on falling prices, held by funds shrank to 16,798 futures and options contracts as of May 7 from 23,368 a week earlier, according to the U.S. Commodity Futures Trading Commission.

To contact Bloomberg News staff for this story: Helen Sun in Shanghai at hsun30@bloomberg.net

To contact the editor responsible for this story: Brett Miller at bmiller30@bloomberg.net

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