Copper Trades Near Record on Peru Protest, Crude Oil, Dollar

By Glenys Sim

July 3 (Bloomberg) -- Copper rose for a third day in Asia, trading near the highest ever, as an ongoing strike in Peru raised concerns that supplies may be cut.

Copper also climbed as a slumping dollar, record oil prices and falling equities boosted demand for alternative investments. The metal has advanced 32 percent this year partly on output disruptions at mines in Latin America.

`Strike action has affected most of the base metals, but it is copper that is understandably wielding the most support given the extreme tightness mine supply is facing this year,'' analysts at Barclays Capital Inc. said in a report yesterday.

Copper for delivery in three months rose as much as $160, or 1.8 percent, to $8,880 a metric ton on the London Metal Exchange, and traded at $8,810 at 9:28 a.m. Singapore time. The contract reached a record of $8,940 yesterday.

Copper for September delivery on the Shanghai Futures Exchange added as much as 1.8 percent to 64,830 yuan ($9,282), the highest for a most-active contract since May 7. It stood at 64,740 yuan at 9:33 a.m. local time.

Peruvian workers are on strike at mines run by Barrick Gold Corp., Southern Copper Corp., Renco Group Inc.'s Doe Run Peru unit, Shougang Corp.'s Hierroperu iron unit, Cia. Minera Antamina and Volcan Cia. Minera SA, according to the country's Mining Federation.

Copper is also being ``dragged higher'' by crude oil prices and the soft U.S. dollar, said Darren Gibbs, chief economist at Deutsche Bank AG in Auckland.

Oil gained to a record $144.44 a barrel after a U.S. government report showed an unexpected decline in inventories, while the dollar traded near a two-month low against the euro ahead of the European Central Bank interest rate decision and U.S. jobs report.

Among other LME-traded metals, aluminum was up 0.6 percent at $3,218 a ton, zinc gained 1.8 percent to $1,898, lead rose 0.9 percent to $1,720, and nickel added 1 percent to trade at $21,350. Tin had not traded as of 9:36 a.m. in Singapore.

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