Copper Rises for First Day in Four as Chinese Demand Revives

By Glenys Sim

Aug. 19 (Bloomberg) -- Copper gained in Asia for the first time in four days as purchasing in China, the world's biggest consumer, picked up following recent price declines.

The metal has fallen over 9 percent in the past month on concerns a global economic slowdown will crimp demand, and as the dollar rallied against major currencies, curbing the appeal of raw material investments.

``Chinese consumers are still interested in buying London Metal Exchange copper, especially when there are price dips, even though physical demand is not great at the moment,'' said Zhou Jiaming, an analyst at Zhongda Futures Co. ``Background support for copper is coming from stockpiles, which are still pretty low, and ongoing supply problems.''

Copper for delivery in three months climbed as much as 0.7 percent to $7,408 a metric ton on the London Metal Exchange and was traded at $7,375 a ton by 11:42 a.m. in Singapore.

Copper for November delivery fell as much as 810 yuan, or 1.4 percent, to 57,380 yuan ($8,357) a ton on the Shanghai Futures Exchange. The most-active contract was at 57,630 yuan by the 11:30 a.m. local time break.

Copper inventories monitored by the Shanghai Futures Exchange fell for a fourth week to 24,825 metric tons, the lowest since February. LME warehouse stockpiles stood at 154,575 tons yesterday, still 22 percent below levels at the beginning of the year.

``While infrastructure investment in China and other emerging markets should remain potent, the question is whether this will outpace declines'' from auto, housing and consumer sectors in developed markets, Citigroup Inc. analyst John Hill wrote in a report yesterday.

Among other LME-traded metals, aluminum was up 0.4 percent at $2,765 a ton, zinc was down 0.1 percent at $1,658, lead gained 0.3 percent to $1,700, nickel gained 0.8 percent to $18,200, and tin rose 4.9 percent to $20,250 as of 11:58 a.m. Singapore time.

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