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Copper Leads Base Metals Higher in Asia on Outlook for Demand
May 26,2010 13:08CST
industry news

May 26 (Bloomberg) -- Copper gained, pacing an advance in industrial metals, as equities and commodities rebounded on speculation that the recent slump in financial markets was excessive given the outlook for demand.

Three-month copper on the London Metal Exchange advanced as much as 1.8 percent to $6,848 a metric ton, and was at $6,833 at 12:24 p.m. in Singapore. Futures in Shanghai rose as much as 1.7 percent to 55,060 yuan ($8,063) a ton.

U.S. stocks erased losses in the final minutes of trading yesterday after dropping as much as 3.1 percent. That helped the euro to pare declines against the dollar even as concerns about Europe's fiscal crisis persist. Asian stocks climbed today after dropping to a 10-month low.

"Volatility will continue as long as uncertainties remain" with Europe's debt crisis and military tensions on the Korean peninsula, Tian Lianfeng, an analyst at Zheshang Futures Co., said from Zhejiang today.

"Fundamentally, in this economic environment, Shanghai copper should be at 48,000 yuan because stockpiles and imports are still so high," Tian said. "Demand in China is quite good currently but it's not enough to mop up the excess supplies in the market."

China's imports of refined copper were 1.06 million tons in the first four months of this year, according to customs data, little changed from last year when state stockpiling and stimulus spending drove purchases. Inventories tallied by the Shanghai Futures Exchange have climbed 76 percent this year.

Aluminum in London advanced 1.1 percent to $2,039.50 a ton, zinc gained 3.5 percent to $1,920 a ton, and lead climbed 2.3 percent to $1,785 a ton. Nickel advanced 1.3 percent to $21,470 a ton, while tin hadn't traded in Singapore.

China's Demand

Rio Tinto Group, the world's third-biggest mining company, expects China's commodity demand to expand, according to Chairman Jan du Plessis.

"China's demand for iron ore, copper, coal and aluminum is expected to grow over the next 15 years, after which time we expect to see increasing demand from India," du Plessis said today at Rio's annual meeting in Melbourne.

Demand for copper in China, the world's largest metals user, may gain as much as 12 percent this year to 8.96 million tons, according to a unit of Wanxiang Group, the country's biggest auto-parts maker.

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