Copper prices in London rose for the third straight session amid speculation that the Federal Reserve will maintain economic stimulus in the U.S., the second-biggest consumer of the metal.
Fed policy makers, who begin a two-day meeting tomorrow, will wait until March to scale back on debt purchases of $85 billion a month, a Bloomberg survey showed this month. Stockpiles of copper monitored by the London Metal Exchange posted the longest slump since July 2009.
“The Fed has put a tailwind behind these markets,” Michael Smith, the president of T&K Futures & Options in Port St. Lucie, Florida, said in a telephone interview. “It’s just a matter of time before we start to see more inflation in commodities, including copper. Once we start to see more steady growth worldwide, you’re going to see copper going higher.”
Copper for delivery in three months gained 0.1 percent to settle at $7,190 a metric ton ($3.26 a pound) at 5:50 p.m. local time on the LME. The metal rose 0.2 percent in the previous two sessions.
Inventories monitored by the LME declined 0.6 percent to 478,200 metric tons, the lowest since March. They dropped for the 38th straight session. China is the top consumer of copper.
In New York, copper futures for December delivery closed unchanged at $3.269 a pound on the Comex. The metal pared gains after reports showed slowing factory output and a drop in home purchases in the U.S. The price has declined 11 percent this year.
Aluminum, lead, nickel and zinc gained in London. Tin fell.