copper rises as china may increase imports

Copper Rises as China May Increase Imports; Aluminum Advances

By Claudia Carpenter

June 9 (Bloomberg) -- Copper rose in London on speculation dwindling inventories will force China, the biggest buyer, to increase imports of the metal. Aluminum rose to a one-week high.

Copper stockpiles in warehouses monitored by the Shanghai Futures Exchange have declined 59 percent in a year, and China's central bank said last month's earthquake may accelerate investment in buildings and roads. China's imports of copper concentrate, an intermediate product, rose 23 percent in the first four months this year.

``Conditions are improving for copper to perform well in the fourth quarter and maybe late in the third quarter,'' said Michael Jansen, an analyst at J.P. Morgan Securities Ltd. in London, who forecasts copper may exceed the record $8,880 a metric ton set in April, by the end of the year. China ``will be running out'' of copper, he said.

Copper for delivery in three months increased $50, or 0.6 percent, to $8,050 a ton as of 9:44 a.m. on the London Metal Exchange. Prices have climbed 21 percent this year.

Inventories of copper in warehouses monitored by the London Metal Exchange dropped 1,400 tons, or 1.1 percent, to 121,150 tons, the exchange said in its daily warehouse report. That's the lowest since May 15. The Shanghai exchange was closed for a national holiday.

Prices extended gains from June 6 when a slump in the dollar triggered a rally in raw materials led by higher energy costs. The dollar declined for a third day against the euro today.

Aluminum jumped $19, or 0.6 percent, to $2,976 and earlier reached $2,990, the highest since May 28. Hot weather forecast for southern China may force some aluminum-plant shutdowns to conserve power, said John Kemp, an analyst at RBS Sempra Metals Ltd. in London.

``It will help keep aluminum quite steady and strong and if temperatures do start to climb, there is a risk of shutdowns,'' Kemp said.

Lead rose $20, or 1 percent, to $1,970 a ton, zinc climbed $20, or 1 percent, to $1,990 a ton and nickel fell $4 to $21,996 a ton. Tin hasn't traded today.

http://www.bloomberg.com/apps/news?pid=20601012&sid=a5cor_S4xSuQ&refer=commodities


To contact the reporter on this story: Claudia Carpenter in London at [email protected] or [email protected]