Copper Jumps to 10-Month High as Reviving Economy Spurs Demand

SHANGHAI, Aug. 13 -- Copper climbed to the highest price since October as renewed economic growth increased demand for industrial metals.

    The Federal Reserve said it would keep interest rates "exceptionally low" for an extended period. Policy makers acknowledged signs that the worst recession since the 1930s may be ending. Copper, used in homes and power grids, is viewed as a barometer of economic growth.

    "Optimism on an economic recovery is fueling buying," Jin Shan, a Minmetals Starfutures Co. trader, said from Shenzhen.

    Three-month delivery copper advanced as much as 2 percent to $6,314 a metric ton on the London Metal Exchange, the highest level since Oct. 1, before trading at $6,299.75 at 10:42 a.m. Singapore time.

    Copper for November delivery on the Shanghai Futures Exchange climbed as much as 5 percent, or the daily limit, from the previous settlement price to 50,280 yuan ($7,357) a ton, the highest since Oct. 6. The contract last traded at 49,430 yuan.

    Shanghai copper rebounded after dropping as much as 2.1 yesterday on a decline in China's new loan growth in July.

    "The slowdown in China's loan growth isn't a problem as the multiplier effect is still in place," Gu Jianjun, an investment manager at Jingyuan Futures Co. said from Shanghai today, referring to an expansion of the country's money supply.

    China's new loans plunged to 355.9 billion yuan, less than a quarter of advances in June, the central bank said this week. M2, the broadest measure of money supply, rose 28.4 percent.

    Among other LME-traded metals, aluminum rose 1.3 percent to $2,010 a ton, zinc added 1.8 percent to $1,885 a ton and lead jumped 2.3 percent to $1,889 a ton. Nickel climbed 2.9 percent to $20,210 and tin was 0.9 percent up at $14,990 as of 9:58 a.m. in Singapore.

    (Source: Bloomberg)