copper snaps two days of declines in london

Copper Snaps Two Days of Declines in London as Stockpiles Fall

By Claudia Carpenter

Sept. 11 (Bloomberg) -- Copper snapped two days of declines in London after a drop in inventories suggested demand is picking up. Nickel and other industrial metals also gained.

Copper inventories monitored by the London Metal Exchange declined 0.2 percent to 137,275 metric tons. So-called canceled warrants, or stockpiled metal that's due to be taken out of storage, representing 6 percent of total inventories, more than double the proportion at the end of last week, LME figures show.

``You would expect inventories to fall in the next couple of days,'' said Michael Widmer, head of metals research at Calyon in London. ``Demand is probably picking up at the moment.''

Copper for delivery in three months on the LME gained $140, or 2 percent, to $7,300 a metric ton as of 10:34 a.m. local time. The metal, used in wiring and water pipes, has climbed 15 percent this year.

Cancelled warrants for LME copper stockpiles rose 13 percent to 8,200 tons after more than doubling yesterday. The warrants represented 2.5 percent of total LME copper inventories at the end of last week.

Tin gained $375 to $15,100 a ton as inventories fell to the lowest in almost seven weeks. Exchange-monitored stockpiles declined 3.2 percent to 13,525 tons, the lowest since July 26.

Lead gained $85 to $2,950 a ton, heading for its first one- day increase since Aug. 30. Inventories of 23,900 tons are the lowest since March 1990 and may decline further as demand from manufacturers of car batteries typically climbs in the fourth quarter, Widmer said.

Zinc advanced $45 to $2,749 a ton, rebounding from a 17- month low of $2,680 traded yesterday. The so-called relative strength index tracking the metal price in the past 14 days registered a reading of 25.17 yesterday. A reading of 30 or less typically indicates declines were overdone and prices are set to increase.

Aluminum dropped $1 to $2,423 and nickel gained $275 to $27,000.

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