LONDON, Nov. 18 -- Copper prices rose in New York on speculation that demand will remain robust in China, the world's biggest metal user.
China is experiencing "powerful" growth in demand for all commodities and will lead the global economic recovery, Evy Hambro, who helps manage the $11.6 billion World Mining Fund at BlackRock Investment Management Ltd., said yesterday. Copper prices have more than doubled this year as Chinese imports rose to a record in the first half.
"The Chinese story has been very encouraging and has helped to keep a floor under prices," said Matthew Zeman, a trader at LaSalle Futures Group in Chicago. "This is the kind of market where people really want to buy on the dips."
Copper futures for March delivery rose 0.45 cent, or 0.1 percent, to $3.133 a pound on the Comex division of the New York Mercantile Exchange. Yesterday, the metal reached $3.1525, the highest in more than 13 months.
Earlier, the price dropped as much as 0.9 percent as the dollar rebounded from a 15-month low against a basket of major currencies, eroding demand for commodities as an alternative investment.
Federal Reserve policy will ensure that the "dollar is strong," Ben S. Bernanke, the central bank's chairman, said yesterday. Copper also dropped as the World Bank's chief economist said the global economic rebound remains "fragile."
"Moves in the dollar tend to be a proxy for the level of risk appetite in the market," said Nicholas Snowdon, an analyst at Barclays Capital in London.
The U.S. continues to face "significant economic challenges," Bernanke said yesterday at a New York luncheon. He repeated the Fed's Nov. 4 pledge to keep interest rates low for an "extended period."
"It might indicate to some the recession is deeper and longer than they had expected," Snowdon said. "At the same time, people might draw confidence that the government's fiscal and monetary policy support mechanisms will last longer than expected."
Copper for delivery in three months fell $24, or 0.4 percent, to $6,826 a metric ton ($3.10 a pound) on the London Metal Exchange.
Aluminum and nickel gained in London, while lead, tin and zinc dropped.