By Anna Stablum
Aug. 28 (Bloomberg) -- Copper rose to the highest in almost 11 months in New York on speculation revived economic growth will spur demand. Lead jumped to a one-year high.
European confidence in the economic outlook increased this month to the highest since October, the European Commission said today. The economy in the U.S., the second-biggest copper buyer after China, shrank less than economists anticipated in the second quarter, a Commerce Department report showed yesterday.
“The trend remains upward,” John Meyer, head of research at Fairfax IS in London, said by phone. “Investors are in for the long haul and they see general positive momentum.”
Copper futures for December delivery rose 11.05 cents, or 3.9 percent, to $2.9825 a pound on the New York Mercantile Exchange’s Comex division at 8:27 a.m. local time and earlier gained to $2.9895, the highest since Sept. 26, 2008. The three- month contract on the London Metal Exchange increased 4.2 percent to $6,535 a metric ton.
RBC Capital Markets raised its 2010 forecast for copper and expects the metal to average $2.50 a pound ($5,512 a ton) next year, up from $2.10 a pound previously, it said in a report.
A recovery in consumption in the 30 member countries of the Organization for Economic Cooperation and Development “is imminent and will create significant upside potential for prices in the second half,” according to a Barclays Capital report dated yesterday.
“We see further upside ahead to prices as the economic recovery gathers steam.”
Chinese Stockpiles Increase
Imports of refined copper into China, the world’s largest consumer, more than doubled in the first half. The country’s government is spending 4 trillion yuan ($585 billion) to stimulate the local economy. Shanghai copper stockpiles climbed for a fifth week to the highest in two years, the Shanghai Futures Exchange said in a report today. Inventories of the metal rose 6.1 percent, to 86,625 tons, the highest level since the week ended Aug. 16, 2007.
Among other LME metals for three-month delivery, lead jumped 5.8 percent to $2,126.50 a ton. Earlier, it climbed to $2,134, the highest price since Aug. 4, 2008. Lead has risen 14 percent this week on closings of Chinese lead smelters. The country accounts for about 35 percent of global lead production, according to RBS Global Banking & Markets.
Aluminum added 1.9 percent to $1,920 a ton and tin was 1.4 percent higher at $14,200 a ton. Nickel rose 3.9 percent to $19,490 a ton and zinc gained 3 percent to $1,885.50 a ton.
To contact the reporter on this story: Anna Stablum in London at astablum@bloomberg.net
Last Updated: August 28, 2009 08:36 EDT
