Copper futures rose for the second straight day on speculation that demand will increase amid economic reforms in China, the world’s biggest consumer.
China’s benchmark stock index rose to a one-month high after the central bank elaborated on plans to loosen controls on financial markets. Yesterday, copper slumped to a 14-week low, partly on concern the U.S. housing recovery is slowing.
“The China chatter is supporting copper,” Frank McGhee, the head dealer at Integrated Brokerage Services in Chicago, said in a telephone interview. “Also, we are seeing some buying after the sharp drop in prices.”
Copper futures for March delivery gained 0.1 percent to settle at $3.1685 a pound at 1:18 p.m. on the Comex in New York. Yesterday, the metal climbed 0.2 percent.
A surplus in the global market probably won’t occur until the second half of next year, later than anticipated, said Diego Hernandez, the chief executive officer of Antofagasta Plc, the copper company controlled by Chile’s billionaire Luksic family. Chinese manufacturers are building inventory at current prices, he said.
On the London Metal Exchange, copper for delivery in three months rose 0.4 percent to $6,996 a metric ton ($3.17 a pound). The price has dropped 12 percent this year.
Stockpiles monitored by the LME extended a slump to the lowest since February.
Lead advanced, while aluminum, nickel and zinc fell in London. Tin was unchanged.