Metals News
Copper Gains as Increased Chinese Imports Bolster Confidence
industry news
02:44PM
Jan 11,2010
Source:SMM

Jan. 11 (Bloomberg) -- Copper climbed for the first time in three days in Asia as an increase in China's imports boosted optimism that a global economic revival is under way. Aluminum, zinc, lead and nickel also advanced.

China, the world's largest metals user, imported 369,368 metric tons of copper and its products in December, 27 percent more than in November, the customs bureau said yesterday. The nation's exports of all products climbed for the first time in 14 months and overall imports jumped to a record, adding to signs of a global economic recovery.

"The data certainly suggests the world economy is well on its way to recovering from the recession," said Shi Hai, an analyst at Shanghai Tonglian Futures Co. "The data has reaffirmed investors' belief that China will continue to lead the rebound."

Copper for delivery in three months on the London Metal Exchange rose as much as 2.9 percent to $7,675 a ton and traded at $7,650 at 10:30 a.m. in Singapore. The metal used in cars and construction reached $7,796 a ton on Jan. 7, the highest price since Aug. 22, 2008.

March-delivery copper on the Comex division of the New York Mercantile Exchange gained as much as 2.6 percent to $3.4875 a pound. April-delivery copper on the Shanghai Futures Exchange climbed as much as 3 percent to 62,520 yuan ($9,156) a ton, and last traded at 61,900 yuan.

Copper more than doubled last year after China's $586 billion stimulus spending spurred raw-material purchases and drove imports of the metal to record levels.

Credit Tightening

Still, copper prices dropped 2.6 percent in the final two days of trading last week after China's central bank guided three-month bill yields higher for the first time since August, suggesting that the government wants to curb lending to limit the risk of property speculation and resurgent inflation.

"China is still in danger of asset price bubbles and last year's easy credit days are coming to an end as the government moves to rein in liquidity," said Shi.

Metal prices also gained as the dollar dropped for a second day to a three-week low against a basket of six currencies, including the euro and yen. The U.S. currency declined to $1.4495 against the euro, the weakest since Dec. 17, and last traded at $1.4481.

Among other LME-traded metals, aluminum rose 2.2 percent to $2,335 a ton, zinc gained 3.5 percent at $2,610 a ton, lead climbed 2.9 percent to $2,605 a ton and nickel advanced 2.2 percent at $18,300 a ton. Tin was yet to trade. 
 
 

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