Copper Rises for First Day in Three on Dollar Drop, Equity Gain

SINGAPORE, June 10 -- Copper advanced for the first time in three days as equities gained and a weakening dollar renewed concern that inflation may accelerate.

    The metal used in plumbing and electrical wiring rallied as the Dollar Index, a measure of the greenback against six major currencies, fell for the first day in three, sliding 0.5 percent to 80.542. The MSCI World Index of equities advanced 0.5 percent, gaining for the first time in three days.

    "Copper remains highly correlated with the dollar and equities," Zhao Kai, an analyst at Jinrui Futures Co., wrote in an e-mailed report today.

    Three-month delivery copper on the London Metal Exchange gained 1.4 percent to $5,049.50 a metric ton at 3:23 p.m. Singapore time. September-delivery copper on the Shanghai Futures Exchange rose as much as 2.1 percent to 41,340 yuan ($6,049) a ton before closing up 1.2 percent at 40,980 yuan. July-delivery copper on the Comex division of the New York Mercantile Exchange gained 1.1 percent to $2.2780 a pound.

    A report later this week probably will show China's spending on roads, power grids and property accelerated for a fourth month in May as the government stepped up spending to revive the world's third-largest economy.

    Urban fixed-asset investment likely grew 31 percent in the five months through May from a year ago, according to the median estimate of 16 economists surveyed by Bloomberg News.

    China is the world's largest copper consumer.

    China Aluminum

    Aluminum extended gains from yesterday's six-month closing high in London, adding 0.3 percent to $1,625.25 a ton even as China, the world's largest producer, raised tax breaks on exports of foil in an effort to help companies weather a slump in overseas shipments and sustain growth.

    "The trend for London aluminum seems still up, despite China's rebate increase," Jinrui Futures analyst Fu Bin wrote in the report.

    Among other LME-traded metals, lead increased 0.7 percent to $1,680 a ton and tin added 0.7 percent to $15,000 a ton. Zinc Jumped 1.9 percent to $1,575 a ton and nickel advanced 1.6 percent to $14,525 a ton at 3:35 p.m. in Singapore.

    (Source: Bloomberg)