Copper Has Biggest Quarterly Gain Since September

Copper rose, capping the biggest quarterly advance since September, as gains in the housing market signaled higher demand in the U.S., the world’s second-largest consumer.

The number of contracts to purchase previously owned U.S. homes jumped in May by 6.1 percent, the most since April 2010, the National Association of Realtors said today. The Copper Development Association estimates that construction accounts for 40 percent of demand for the metal used in pipes and wires.

“Our brokerage division was stunned by the housing number,” Peter Thomas, a senior vice president at Zaner Group in Chicago, said in a telephone interview. “As you see this giant surge in housing, you’ll see strong demand for the industry to create more things,” including air-conditioning units that use copper, he said.

On the Comex in New York, copper futures for September delivery gained 1.1 percent to settle at $3.2035 a pound at 1:10 p.m. The price rose 5.9 percent this quarter.

On the London Metal Exchange, copper for delivery in three months rose 1 percent to $7,015 a metric ton ($3.18 a pound), the biggest gain since June 20. The price has climbed 3.9 percent in the past 12 months.

In the second quarter, stockpiles monitored by the LME tumbled 42 percent, the most in five years. Inventories have dropped 58 percent in 2014 to 154,675 tons, the lowest since 2008.

Today, zinc rose 1.5 percent to $2,217 a ton, the biggest gain since May 14. In the second quarter, the price climbed 12 percent, the most since Dec. 31, 2010. Inventories this month fell to the lowest since December 2010.

“Zinc is expected to be the next big base-metal play for investors,” Patricia Mohr, a commodity market specialist at Scotiabank Group in Toronto, wrote in a note.

Aluminum, nickel, lead and tin gained in London today.

In the second quarter, nickel jumped 20 percent, the most since March 31, 2010. Indonesia banned exports of raw ore in January.

Before it's here, it's on the Bloomberg Terminal.