Aug. 29 (Bloomberg) –Copper climbed for a third day in Shanghai after Federal Reserve Chairman Ben S. Bernanke said the U.S. economy is gradually recovering and that he has the tools to spur growth, boosting demand prospects for the metal.
The November-delivery contract on the Shanghai Futures Exchange added 0.3 percent to close at 67,610 yuan ($10,595) a metric ton after trading as high as 67,630 yuan, the highest level for a most-active since Aug. 15. The contract rose 1.6 percent last week, the first such advance in four week.
Bernanke said the recovery is likely to improve in the second half, and the Fed can aid if needed, without giving details on what policy makers may do. A second day has been added to the Federal Open Market Committee meeting next month for "a fuller discussion" of the economy and the Fed's possible response, he said at Jackson Hole, Wyoming on Aug. 26.
"The macro conditions are now turning bullish for copper," Che Hongyun, an analyst at Galaxy Futures Co., said by phone from Shanghai today. The Federal Reserve has allayed concern that the U.S. economy will stall and boosted optimism over the global economic recovery.
Copper stockpiles fell 8.7 percent to 102,258 tons last week, the Shanghai exchange said Aug. 26. Production of the metal in China climbed 15 percent from a year earlier in the first seven months, data showed on Aug. 9.
"It's possible that China has stepped into the peak consumption season," Che said. "Big users such as wire and cables now see more orders with expansion of China's power network project."
Copper earlier today fell as much as 0.6 percent on concern that moves to curb credit growth and tame inflation by China, the biggest consumer, may reduce demand for raw materials.
Reserve requirements are being extended to the margin deposits commercial banks collect from customers, a move that may drain 900 billion yuan from the banking system over six months, Bank of America Merrill Lynch economist Lu Ting said in a note on Aug. 26. Mizuho Securities Asia Ltd. cited similar information. A central bank press official declined to comment.
Aluminum for November delivery in Shanghai was little changed at 17,370 yuan a ton and November-delivery zinc rose 0.2 percent to 17,125 yuan a ton.
Copper for December delivery declined 0.3 percent to $4.104 a pound on the Comex in New York, heading for the first fall in five days. The price gained 2.9 percent last week, after dropping 11 percent in the previous three weeks on concern the global economic recovery was faltering.
Trading on the London Metal Exchange was closed today for the Summer Bank Holiday. On Aug. 26, copper for three-month delivery on the LME closed 0.5 percent higher at $9,075 a ton after touching $9,139, the highest price since Aug. 5.