Copper is up tonight, and this re yesterday: Copper Gains in...

Copper is up tonight, and this re yesterday:

Copper Gains in London on Speculation Chinese Buying Advances
By Claudia Carpenter and Anna Stablum

Feb. 18 (Bloomberg) -- Copper rose from a two-week low in London on speculation that China, the world’s largest consumer of the metal, is accelerating purchases. Aluminum also climbed.

Copper inventories in London Metal Exchange-monitored warehouses declined 1,125 metric tons, the most since Oct. 21. A tripling of stockpiles contributed to copper’s 60 percent slide in the past year. Today’s drop took place as metal was taken from South Korean and Singapore warehouses that are closest to China.

“It’s going to China,’ said Lars Steffensen, managing director of Southend-on-Sea, England-based Ebullio Capital Management LLP, which has 3.6 percent of its $25 million invested in copper futures. “This drop today is probably a good indication that we’re getting to a flattening of the relentless trend of more stock coming in.”

Copper for three-month delivery rose $52, or 1.6 percent, to $3,237 a metric ton at 5:05 p.m. local time on the LME. The contract earlier reached $3,165, the lowest since Feb. 2.

Pricing information from the LME to data distributors was disrupted from 3:14 p.m. to 4:21 p.m., LME spokesman Chris Evans said. No data was lost and trading on the electronic Select system wasn’t affected, he said.

China’s State Reserve Bureau, the government’s stockpiling agency, “is buying and the stock increases on the LME are slowing, putting a floor under prices,” said London-based analyst Max Layton at Macquarie Group Ltd.

He expects copper to trade at an average of $1.55 a pound ($3,417 a ton) this year. The average for the three-month contract so far this year is $3,328.

Open interest in the metal on the LME has increased 2.4 percent this year, signaling investor demand for copper, used in plumbing and electrical wiring.

Risk, Reward

“We’re betting that supply isn’t going to be able to keep up with the growth that we envision in consumption,” Steffensen said, adding that Ebullio has been buying copper since December. While prices may fall a further $1,000, there’s scope for a gain of $6,000, he said, without giving a timeframe.

Aluminum climbed $6, or 0.5 percent, to $1,336 a ton. It earlier fell to $1,314, the lowest since October 2002. U.S. and Canadian demand for the metal fell 16 percent from a year earlier in December and slid 8.1 percent for 2008 as a whole, the Aluminum Association Inc. said.

LME inventories of aluminum, used in the car and construction industries, rose to a record 3.09 million tons, with the majority going into warehouses in the U.S.

The increase suggests production will have to be cut further, said Gayle Berry, an analyst at Barclays Capital in London.

Among other metals for delivery in three months on the LME, zinc gained $10 to $1,120 a ton, tin declined $27 to $10,773 a ton and lead lost $39 to $1,070 a ton.

Nickel dropped $185 to $9,715 a ton. The metal, used in stainless steel, has shed 17 percent this year.

“The nickel market is still pretty dire,” European Nickel Plc Managing Director Simon Purkiss said by phone. “We’ve seen no uptick in demand yet. It all depends on when the stainless steel market comes back.”