Copper Leads Metals Higher as Dollar Trades Near Record Low

By Li Xiaowei

July 22 (Bloomberg) -- Copper gained for a second day, extending an advance from a one-month low, as the dollar fell against the euro, boosting investment in commodities as an alternative asset and hedge against inflation.

The U.S. currency traded near a record low against the euro after American Express Co. said profits fell as more consumers defaulted on loans, raising concern the U.S. economic slowdown will deepen. Weakness in the dollar has helped copper rally 22 percent this year.

``Copper is technically supported by the dollar, yet pressure from low Chinese demand in the summer season isn't gone,'' said Li Rong, an analyst at Great Wall Futures Co., by phone from Shanghai today.

Copper for delivery in three months on the London Metal Exchange added 0.6 percent to $8,171 a metric ton at 12:07 p.m. Shanghai time. The metal, which reached a record $8,940 a ton July 2, dropped to as low as $8,030 last week.

Copper for October Delivery was 0.3 percent up at 62,450 yuan ($9,157) a ton at the 11:30 a.m. local time break on the Shanghai Futures Exchange.

Refined copper imports by China, the world's largest user, declined for a second month in June as higher overseas prices deterred buyers and demand from processors eased the traditional summer slowdown. Imports fell to 75,707 tons, down 20 percent from the previous month, customs office data showed today.

Among other LME traded metals, aluminum was up 0.6 percent to $3,063, lead gained 0.3 percent to $2,055.50, nickel rose 0.5 percent to $20,650, zinc slid 0.3 percent to $1,855 tin was untraded in Asia after settling at $23,550 yesterday.

To contact the reporter for this story: Li Xiaowei in Shanghai at Xli12@bloomberg.net