Copper Narrows Weekly Drop on Signs Price Slump Spurred Buying
Copper rose in London, narrowing this week’s drop, on signs a price slump encouraged buyers in leading global consumer China as demand strengthens.
Some Chinese buyers are capitalizing on gaps between prices in Shanghai and London, Newedge Group SA said. The market is entering a period of seasonally stronger demand, according to Macquarie Group Ltd. Copper reached the lowest level since August this week as Cyprus neared financial collapse, reviving concern Europe’s debt crisis will curb growth and metals demand.
“The lower price has brought Chinese buyers to the market,” said Andrew Silver, a broker at Triland Metals Ltd., which trades on the London Metal Exchange floor along with 10 other companies including JPMorgan Chase & Co. Traders were adjusting positions before the weekend, he said by e-mail today.
Copper for delivery in three months added 0.9 percent to $7,654 a metric ton by 11 a.m. on the LME, reducing the weekly slide to 1.3 percent. The metal for delivery in May rose 0.8 percent to $3.4615 a pound on the Comex in New York.
Copper in Shanghai was about 700 yuan ($112) a ton more expensive than in London yesterday, according to figures compiled by Bloomberg, giving more incentive to import. That compares with an average discount this year of about 319 yuan.
“Physical usage is picking up in China,” said Pengjiang “Richard” Fu, director for Asian commodities trading at Newedge in London. “Physical orders received by copper fabricators in March are better than” a year ago, he said.
Manufacturing in the Asian country expanded at a faster pace this month, a survey from HSBC Holdings Plc and Markit Economics showed yesterday.
Copper stockpiles tracked by the LME, up 76 percent this year to the highest since October 2003, rose for a 27th session to 562,475 tons on deliveries in Johor, Malaysia, daily exchange figures showed. Inventories monitored by the Shanghai Futures Exchange reached 239,273 tons, the highest in at least a decade.
Orders to draw copper from LME warehouses climbed 0.5 percent to 64,950 tons on bookings in Antwerp, Belgium. They almost doubled this week.
Tin, nickel, lead, aluminum and zinc advanced in London.
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