Copper Prices Climb as Equity Rebound Bolsters Metal Sentiment

LONDON, July 14 -- Copper prices rose in New York as equity markets rallied, boosting investor sentiment for some industrial metals.

    The Standard & Poor's 500 Index climbed as much as 2 percent on speculation that bank earnings will improve. Some traders follow equities as a gauge for the economic outlook. Last week, copper slid 4.1 percent as the S&P dropped 1.9 percent.

    "Copper is following the movements in the larger markets and acting as a surrogate for the outlook for the economy," said Donald Selkin, the chief market strategist at National Securities Corp. in New York.

    Copper futures for September delivery rose 1.15 cents, or 0.5 percent, to $2.223 a pound on the Comex division of the New York Mercantile Exchange.

    Freeport-McMoRan Copper & Gold Inc., the world's biggest publicly traded copper producer, said operations at its Grasberg mine in Indonesia were normal after a third body was found in the area following weekend attacks. Grasberg is the second- largest copper mine behind Chile's Escondida.

    The attacks are "not having a major impact on prices," said Frank McGhee, the head dealer at Integrated Brokerage Services LLC in Chicago.

    Shrinking inventories signaled higher consumption of the metal. Stockpiles monitored by the London Metal Exchange dropped for a fifth straight session to 257,225 metric tons.

    Copper prices have surged 58 percent this year as China, the world's biggest metal user, boosted reserves.

    "The fall in LME stockpiles is very much China-related," said Charles Kernot, an analyst at Evolution Securities Ltd. in London.

    On the LME, copper for delivery in three months added $37, or 0.8 percent, to $4,895 a metric ton ($2.22 a pound).

    Tin jumped 2.5 percent to $12,300 a ton on the LME, and nickel gained 1.7 percent to $14,730. Aluminum, lead and zinc fell.

    (Source: Bloomberg)