Sept. 16 (Bloomberg) –Copper climbed for a second day after the European Central Bank and international policy makers coordinated to lend dollars to banks to help tame the credit crisis, boosting demand prospects for industrial metals.
The three-month contract on the London Metal Exchange rose as much as 0.8 percent to $8,779 per metric ton and traded at $8,770.75 at 4 p.m. in Tokyo. The price has fallen 0.6 percent this week, a second weekly drop. On Sept. 14, the metal touched $8,590, the lowest price since Aug. 11.
The ECB said it teamed up with the Federal Reserve, the Bank of England, the Bank of Japan and the Swiss National Bank to extend three-month loans to euro-area banks in an effort to ensure they have enough cash for the rest of the year. The leaders of France and Germany confirmed this week they will support Greece's continued participation in the euro currency.
"It's a relief rally," Peter Richardson, chief metals economist at Morgan Stanley Australia Ltd., said today. "I don't think this is an indication that the problem is solved. It's simply that they bought a bit of time, in my view, to try and put together more lasting solution to this problem."
Asian stocks rose as much as 2.4 percent today, paring the regional benchmark index's decline this week. The Standard & Poor's 500 Index advanced for a fourth day, advancing 1.7 percent yesterday.
In Indonesia, about 8,000 non-staff workers at Freeport- McMoRan Copper & Gold Inc.'s Grasberg mine began a one-month strike, union official Virgo Solossa said on Sept. 15. Freeport doesn't see a short-term effect on output from a separate strike at its Cero Verde mine in Peru, Bruce Clemens, an official at the unit, said yesterday in Peru.
The strike at the Grasberg mine, "with 70 percent of their employees, is potentially a quite important, additional factor in a market where we had over 500,000 tons of production lost already this year," Richardson said.
The Grasberg dispute may result in a loss of 230,000 tons of ore per day, Thamrin Sihite, director general of minerals and coal at the energy ministry, said at a briefing in Jakarta today.
Copper for November delivery on the Shanghai Futures Exchange rose 1.4 percent to end at 65,970 yuan ($10,332) a ton.
Nickel climbed 0.5 percent to $21,903 a ton in London, aluminum gained 0.2 percent to $2,378 a ton, and lead advanced 0.4 percent to $2,395.75 a ton. Zinc and tin were little changed at $2,191.25 a ton and $23,575 a ton, respectively.