Oct. 10 (Bloomberg) –Copper rose for a fourth day in New York after the leaders of France and Germany pledged a plan to stem Europe's debt crisis in three weeks.
The crisis is the biggest risk for industrial metals, with a possible Chinese slowdown viewed as less of a concern, Macquarie Group Ltd. said in a report today. Metals are oversold, with "macroeconomic fear currently outweighing still- robust fundamentals," the bank said, citing a poll taken during last week's London Metal Exchange Week.
"News out of the euro zone looks to be constructive," RBC Capital Markets LLC said in a report. "This week we should continue to see a more positive view of commodities as last week's progress on dealing with global economic issues and a relatively positive U.S. employment report help turn sentiment more neutral than what had been outright bearish."
Copper for December delivery climbed 5.6 cents, or 1.7 percent, to $3.3295 a pound by 7:01 a.m. on the Comex in New York. Prices reached $3.3485, the highest level since Sept. 28. Copper for three-month delivery was little changed at $7,367 a metric ton on the LME.
German Chancellor Angela Merkel and French President Nicolas Sarkozy promised to deliver a plan for recapitalizing European banks by the Nov. 3 Group of 20 summit. The euro gained as much as 1.7 percent versus the dollar and futures on the Standard & Poor's 500 Index rose.
Hedge-fund managers and other large speculators increased their net-short position in New York copper futures in the week ended Oct. 4, according to U.S. Commodity Futures Trading Commission data. Short positions are bets on lower prices.
In Indonesia, two workers from Freeport-McMoRan Copper & Gold Inc.'s strike-hit Grasberg mine were shot by police after protesters burned three company vehicles in a bus depot, according to a police spokesman. About 8,000 workers, or 70 percent of the mine's workforce excluding contractors, started a month-long strike on Sept. 15 for higher wages.
"The strike at Grasberg seems to be escalating," Commerzbank AG said in a report today. "Consequently, production shortages are increasingly likely, which is likely to intensify the already tight supply situation in the global copper market."
Copper inventories monitored by the LME fell 1 percent to 462,525 tons, the lowest level since Aug. 15, daily exchange futures showed. Canceled warrants, or orders to draw copper from LME inventories, slid 4 percent to 52,625 tons today, with the biggest declines in South Korea. The warrants climbed 71 percent last week to 54,825 tons as of Oct. 7, led by gains in Singapore and South Korea, the closest locations to China.
Markets in China reopened today after a week of public holidays. Import and export figures for September are scheduled for release Oct. 13.
Zinc, lead, tin and nickel gained in London. Aluminum slipped.