but the pressure is still on in the ridiculously volatile markets.
Copper Climbs for Second Day on Dollar's Decline; Lead Rises
By Claudia Carpenter
Oct. 20 (Bloomberg) -- Copper rose in London for a second day as a lower dollar spurred demand for the metal from buyers using other currencies. Lead also climbed.
The dollar fell for a second day against a basket of six currencies, including the euro and yen. Copper, used in pipes and wires, has dropped 28 percent this year while the dollar index has gained 7.1 percent.
``Dollar weakness is supportive because it makes commodities cheaper for buyers in other countries,'' said Peter Fertig, a consultant to Dresdner Kleinwort in Hainburg, Germany. Investors are less interested in commodities because of concern there will be a recession, he said.
Copper for delivery in three months gained $40, or 0.8 percent, to $4,850 a metric ton as of 10:32 a.m. on the London Metal Exchange. The price has fallen 37 percent in the past year and slid to a 33-month low last week.
Inventories of the metal in warehouses monitored by the LME jumped 950 tons to 212,400 tons, taking this year's increase to 7.6 percent. Stockpiles are climbing in Hamburg for the first time since January 2006 and are the highest since January in St. Louis.
Inventories are falling in South Korea near China, the world's largest consumer of the metal. Growth may accelerate after closures to clear the air for the Olympic Games in August, Fertig said. China's industrial production rose 11.4 percent in September from a year earlier, the statistics bureau said in Beijing today. Economists forecast a 13.4 percent increase, the median in a Bloomberg News survey.
China's copper production dropped 1 percent in September from August, according to Mainland Marketing Research Co.
Change of Plan
Industrial metals including copper and nickel will average less than previously forecast in 2009 as demand declines, Credit Suisse Group AG said, adding that its new estimates may still be too high.
Copper will average $2.50 a pound ($5,878 a ton) in 2009, below a previous forecast of $4, Credit Suisse analysts led by London-based Jeremy Gray wrote in a report e-mailed today.
Nickel will average $5.75 per pound next year, compared with an earlier forecast of $11. Zinc will average 75 cents per pound, as against $1 previously, the report said.
``Many of our CEOs are now beginning to reassess their plans to build new capacity, which could in turn see a further hit to industrial production growth, but ironically create the seeds for the next commodity bull market as supply could become further constrained,'' Gray wrote.
Aluminum slid $7 to $2,198 a ton, lead rose $12 to $1,452 a ton and nickel fell $50 to $10,750 a ton. Tin gained $200 to $13,200 a ton and zinc rose $27 to $1,257 a ton.
