Copper advanced in London, reversing an early decline, as oil prices dropped for a second day, easing concern that high fuel costs may curb the global economic recovery and reduce demand growth.
Copper for three-month delivery gained 0.7 percent to $9,596.75 a metric ton at 6:02 p.m. in Singapore. New York- traded crude fell as much as 0.8 percent today after American Petroleum Institute data showed an inventory increase.
“Risk appetite improved on weaker oil and rallying equities,” Mark Pervan, Melbourne-based head of commodity research at Australia and New Zealand Banking Group Ltd., wrote today in a daily report.
Copper decreased to the lowest level in almost two weeks yesterday. Prices have fallen about 6 percent from a record $10,190 reached Feb. 15 on speculation the oil price rally may slow economic growth and as metal stockpiles expanded.
The Lisbon-based International Copper Study Group projected a 2011 shortage of about 400,000 tons in October. Prices rallied to a record on speculation of such a deficit. Stockpiles tracked by exchanges in London, New York and Shanghai rose for a fifth straight day yesterday to 660,826 tons, the highest level since July, according to Bloomberg data.
“The supply-and-demand picture now looks weaker,” David Thurtell, head of base metals research at Citigroup Inc. in Singapore, said today by phone.
‘Well Supplied’
Copper scrap and concentrate markets are “well supplied,” Deutsche Bank AG’s head of commodities research Michael Lewis wrote in an e-mailed report today. Metal stockpiles in so-called bonded warehouses, which don’t publish data, are “high at around 500,000 to 600,000 tons,” he said in the report.
“The window of opportunity for metals to perform is quickly closing,” Lewis said. “This would generally be a strong quarter for industrial metals from a seasonal perspective and with global growth appearing strong and synchronous.”
On the Shanghai Futures Exchange, the May futures contract closed up 0.8 percent at 71,600 yuan ($10,897) a ton. Futures for May settlement added 0.2 percent to $4.346 a pound on Comex.
Aluminum in London increased 0.5 percent to $2,610 a ton, zinc dropped 0.2 percent to $2,390 a ton, and lead was unchanged at $2,590 a ton. Tin gained 0.3 percent to $30,675 a ton and nickel added 0.9 percent to $27,075 a ton.
-- Editors: Ravil Shirodkar, Matthew Oakley
To contact the reporter on this story: Chanyaporn Chanjaroen in Singapore at cchanjaroen@bloomberg.net
To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net
Source: http://www.bloomberg.com/news/2011-03-09/copper-increases-as-crude-oil-price-drop-eases-slowdown-concern.html
