Aug. 17 (Bloomberg) –Copper advanced as Chinese buying continued to draw down inventories at the London Metal Exchange warehouses.

Three-month copper on the London Metal Exchange rose as much as 0.7 percent to $8,890 per metric ton, and was at $8,886 by 10:27 a.m. in Shanghai. Copper for November delivery on the Shanghai Futures Exchange rose 0.3 percent to 66,670 yuan ($10,431) a ton.

Copper inventories tracked by the LME around the world had fallen three consecutive weeks to 461,775 tons as of Aug. 12. Stockpiles in Asia yesterday dropped to 173,575 tons, the lowest level since April.

"The reason why copper was able to find support at the current level during the market turmoil in the last two weeks is because of Chinese buying," said Pang Ying, an analyst at Shenzhen Rongtuo Trading Co. Purchasing was spurred after prices dipped below $9,000 a ton, Pang said.

Three-month copper in London tumbled to an eight-month low of $8,446.25 a ton on Aug. 9 on concerns that a downgrade of the U.S. long-term credit rating by Standard & Poor's and contagion from the European debt crisis may cause the global economic recovery to falter.

One of the more positive outcomes from the LME price declines has been a reinvigoration of Chinese spot market buying, said a report by Barclays Capital yesterday. This has been evident from price trends, with the physical premium for cathode rising from $70-90 per ton to $90-110 per ton, according to the report.

Arbitrage trading by buying the metal in London and selling it in Shanghai has become profitable since the beginning of this month, prompting expectation that arrivals will rise in the next couple of months, Pang said.

Aluminum and zinc were little changed at $2,376 and $2,183 per ton in London. Lead rose 0.6 percent to $2,370 a ton, while nickel fell 0.3 percent to $21,630 per ton, and tin declined 0.2 percent to $24,100 per ton.