Copper Gains for Second Day on Better-Than-Expected U.S. Data

By Glenys Sim

July 28 (Bloomberg) -- Copper rose for a second day in Asia on signs demand may be recovering in the U.S., the world's second-largest consumer of the metal used in plumbing and electrical wiring behind China.

Copper rose from a six-week low after reports on July 25 showed U.S. durable goods orders unexpectedly gained, new-home sales decreased at a third the rate forecast by economists and consumer sentiment climbed from a 28-year low. Prices, down 7 percent this month, gained even as stockpiles rose a third week.

``After falling for the past few sessions, investors are looking for any reason to move up again,'' Liu Shuguang, a trader at Zhongcai Futures Co. in Hangzhou, said today.

Three-month copper on the London Metal Exchange gained as much as 0.9 percent to $8,025 a metric ton at 10:40 a.m. Singapore time, extending the 0.7 percent rise on July 25.

Copper for October delivery rose as much as 630 yuan, or 1 percent, to 61,650 yuan ($9,030) a ton on the Shanghai Futures Exchange, and traded at 61,550 yuan at 10:40 a.m. local time.

``Copper is finely poised, and the near-term outlook for prices is extremely difficult to call,'' Macquarie Group Ltd. analysts led by Jim Lennon said in a report today. ``A plausible case can be made for a large price move in either direction in the second half of the year'' depending on whether Chinese demand resumes or demand deteriorates, the report said.

LME-monitored copper stockpiles stood at 133,475 tons July 25, up 8.9 percent this month. Inventories in Shanghai warehouses have risen 27 percent this month to 41,090 tons last week.

Among other LME-traded metals, aluminum rose 0.4 percent to $2,982 a ton, zinc added 0.8 percent to $1,859, and nickel gained 0.8 percent to $18,600. Lead and tin had not yet traded.

To contact the reporter for this story: Glenys Sim in Singapore at gsim4@bloomberg.net