Jan 20, 2012 (Bloomberg) -Copper rose to a 17-week high in New York on speculation China may ease credit controls as growth slows, potentially bolstering demand prospects in the world’s largest user of the metal.
China’s banking regulator is weighing a plan to relax capital requirements for lenders, delaying implementing the most stringent capital-adequacy ratios, four people with knowledge of the matter said. Copper imports into China reached a record high and fourth-quarter economic growth in the country topped economists’ estimates, figures showed this month.
Looser capital rules “would be key in raising economic expectations for China, which in turn will drive base-metal prices higher on the expected incremental demand,” RBC Capital Markets Ltd. said in a report today.
Copper for March delivery gained 1.3 percent to settle at $3.8005 a pound at 1:12 p.m. on the Comex in New York. Prices reached $3.8215, the highest level since Sept. 20.
Metals prices also got support from U.S. economic data. Philadelphia-area manufacturing expanded at a faster pace this month, according to the Federal Reserve Bank of Philadelphia, while Labor Department figures showed applications for jobless benefits dropped to the lowest in almost four years last week.
Freeport-McMoRan Copper & Gold Inc. Chief Executive Officer Richard C. Adkerson said the company’s downstream customers in the U.S. have a “fairly positive” demand outlook. Phoenix- based Freeport, the world’s largest publicly traded copper producer, is seeing improvement in demand from the U.S. auto and construction industries, he said today on a conference call.
On the London Metal Exchange, Copper for three-month delivery rose 1.4 percent to $8,355 a metric ton ($3.79 a pound).
Aluminum, zinc, lead, nickel and tin all climbed in London.