By Anna Stablum and Millie Munshi
July 21 (Bloomberg) -- Copper rose to a nine-month high in London on speculation that recovering economies will spur demand for metals used in construction and automobiles.
Federal Reserve Chairman Ben S. Bernanke said today the U.S. economy is showing “tentative signs of stabilization” and the “pace of decline appears to have slowed significantly.” Copper surged 9.3 percent last week, the most since early February, on an improving economic outlook.
“As the global economy starts to come back, copper prices stand to gain,” said Russel Croft, who helps manage $600 million as a Croft-Leominster Inc. vice president in Baltimore. “Copper will be a good long-term investment.”
Copper for delivery in three months gained $33, or 0.6 percent, to $5,383 a metric ton ($2.44 a pound) at 5:22 p.m. on the London Metal Exchange. Earlier, the price reached $5,469, the highest since Oct. 14.
“The evidence of a turnaround is quite convincing,” said Dan Smith, an analyst at Standard Chartered Plc in London. “It is pretty clear that places like the U.S., Japan and Europe are bottoming out in terms of the cycle.”
“Very tight” copper inventories will continue to help support prices, Richard Adkerson, the chief executive officer of Freeport-McMoRan Copper & Gold Inc., said on a conference call today with analysts. Infrastructure projects in China will help drive demand, he said.
Before today, the price of copper surged 74 percent this year as imports rose to a record in China, the world’s biggest metal user. Inventories monitored by the LME have tumbled 22 percent this year.
Nickel, lead, zinc, aluminum and tin declined on the LME.
Copper futures for September delivery fell 1.55 cents, or 0.6 percent, to $2.4535 a pound on the Comex division of the New York Mercantile Exchange. Earlier, the metal reached $2.4945, the highest since Oct. 14.
