US Copper Import Rise Points to Healthier Economy

NEW YORK, Sept 10 (Reuters) –

Shipments of copper into the United States rose for a fourth straight month in July to their highest levels since March 2009, signaling stronger domestic demand and a healthier outlook for the world's largest economy.

Data from the U.S. International Trade Commission on Thursday showed July copper imports climbed to 66,008 tonnes from 61,590 tonnes in June. [MTL/USITC] The July figures were the highest since 79,975 tonnes were taken in in March, 2009.

It was the fourth straight month of import growth for the metal used primarily in construction and electrical applications, reflecting a strong physical market in the face of persistent jitters about the global economy, analysts said.

"I think this is another indication of U.S. demand being underestimated," said Bill O'Neill, partner of LOGIC Advisors in Upper Saddle River, New Jersey.

"Base metals are telling us no double-dip. The problems with unemployment and housing are still very much with us ... I think copper for a while has been telling us that maybe things are a little bit better," he said.

Since hitting a July low at $2.88 per lb, the benchmark copper futures contract traded at the COMEX metals division of the New York Mercantile Exchange HGZ0 has rallied more than 20 percent to a four-month peak earlier this week at $3.5345.

The rising trend in U.S. copper imports reinforced a recent bullish outlook for the metal from Freeport McMoRan Copper & Gold Inc's (FCX.N) Chief Executive Officer Richard Adkerson.

During his company's second-quarter conference call, Adkerson said the day-to-day copper markets around the world were "stronger than we've seep them in some time". [ID:nN21178630]

That physical market strength helped tip the global copper market into a production deficit of 190,000 tonnes during the first five months of the year, according to the International Copper Study Group (ICSG).

"The basic growth picture is still very much with us, with good demand from Asia," LOGIC Advisors' O'Neill said.

Chinese copper imports soared in August, a sign of potential stronger domestic demand in an economy that is a major driver of global growth.

China is the world's largest consumer of copper.

While Asian demand growth will continue to lead the way, analysts said U.S. stimulus measures should help domestic demand recover.

"The stimulus is being reflected in the copper numbers," said Larry Young, president of Covenant Trading LLC in Chicago.

"Plans are going forward that will require more copper."

President Barack Obama proposed a six-year $50 billion infrastructure plan to revamp highways, rails and airport runways in an effort to create more near-term jobs and improve the long-term U.S. transportation network.

"This is a very good sign for the second half of the year and an even better sign going into the first quarter, first half of next year," said Sterling Smith, an analyst for Country Hedging Inc. in St. Paul, Minnesota.

"It means you will have manufacturing moving and money moving in the economy ... the good ISM manufacturing number a week ago helps to confirm this," he said.

U.S. manufacturing expanded for a 13th straight month in August, calming fears of a double-dip recession.