Copper Heads for First Weekly Gain in Eight on Dollar Weakness

By Glenys Sim

Aug. 22 (Bloomberg) -- Copper headed for its first weekly gain in eight after declines by the U.S. dollar increased investor demand for raw materials.

The metal, used in plumbing and electrical wiring, also advanced on speculation demand in China, the world's largest consumer, will recover after the Olympic Games. Copper has fallen 3.2 percent the past month, partly on weak seasonal demand.

``Factories and building projects that were shut during the Olympics will soon resume and this will support prices,'' said Lin Yuhui, research manager at China International Futures Co. in Shenzhen. ``Expectations are for overall demand to slow compared to last year, however it's unlikely to be by much looking at all the construction going on.''

Copper for delivery in three months on the London Metal Exchange has risen 6.9 percent this week, the biggest gain since March. The metal gained 0.2 percent to $7,870 a metric ton at 9:30 a.m. in Singapore, after rising 4.5 percent yesterday, the largest advance since January.

Copper for November delivery rose as much as 1,340 yuan, or 2.3 percent, to 60,690 yuan ($8,867) a ton on the Shanghai Futures Exchange. The most-active contract last traded at 60,570 yuan.

The dollar traded near the lowest level in more than two weeks against the yen, and headed for its first weekly loss versus the euro ahead of a speech on financial stability by Federal Reserve Chairman Ben S. Bernanke at Jackson Hole, Wyoming.

The currency was at 108.60 yen from 108.43 in New York last yesterday. It also declined to $1.4880 per euro from $1.4899.

Among other LME-traded metals, aluminum was down 0.3 percent at $2,842 a ton, zinc dropped 3 percent to $1,823 and nickel fell 1.6 percent to $21,150. Lead was unchanged at $1,905 a ton and tin had not traded.

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