Sept. 27 (Bloomberg) –Copper rebounded in New York on speculation investors were buying the metal, used in tubing and wiring, to close out bets on lower prices.
Copper rose after tumbling to a 14-month low of $3.0715 a pound yesterday. Speculators were the most bearish on copper since July 2009, as managed-money funds held net-short positions in copper futures and options, data from the U.S. Commodity Futures Trading Commission showed last week.
"Traders are building short positions and will need to cover in the event of a rally, which could lead to sharp jumps," Angus Staines, an analyst at UBS AG in London, wrote in an e-mail today. The so-called short-covering denotes purchases to close out bets on lower prices.
Copper for December delivery rose 14.45 cents, or 4.4 percent, to $3.4275 a pound at 8:41 a.m. on the Comex in New York. Copper for delivery in three months gained 4.1 percent to $7,565 a metric ton on the London Metal Exchange.
Speculators' wagers on falling Comex copper prices totaled 6,672 futures and options contracts as of Sept. 20, data compiled by Bloomberg showed. The measure showed net-long positions a week earlier of 300 futures and options contracts, betting on higher prices.
"Small automaker and Chinese consumer buying are adding to macro short covering," said David Thurtell, an analyst at Citigroup Inc. in Singapore. Chinese buyers should "start re- stocking when the price is right, not a minute before and not a minute after."
"It would seem that the fall in prices over the past few days is now regarded as excessive," Daniel Briesemann, an analyst at Commerzbank AG in Frankfurt, said in a report today. "The low price levels are viewed as attractive buying opportunities."
In Chile, Codelco, the world's largest copper producer, lost 1,413 tons of production after a Sept. 24 power disruption on Chile's central grid, the company said in an e-mailed statement yesterday.
Tin for delivery in three months gained 6.3 percent to $21,600 a ton on the LME. The metal, used in electronics production, climbed as much as 6.8 percent to $21,700 a ton after Indonesia, the biggest exporter, said it plans to halt overseas shipments from Oct. 1 to support prices.
Overseas shipments will be resumed if the price goes to $25,000 per ton, said Johan Murod, director at PT Bangka Belitung Timah Sejahtera, a group of smelters. PT Timah, Indonesia's largest tin producer said it supported the plan.
Aluminum rose 1.2 percent to $2,230.25 a ton. Open interest in LME aluminum futures, or the number of contracts outstanding, climbed to almost 1.3 million lots as of Sept. 23, the most since at least 2005, exchange data on Bloomberg showed.
Zinc, lead, and nickel also advanced in London.