Copper Advances as China May Increase Imports; Aluminum Rises

By Claudia Carpenter

Sept. 22 (Bloomberg) -- Copper rose to a two-week high in London on speculation that declining stockpiles will spur demand in China, the world's largest buyer of the metal. Aluminum and zinc also advanced.

Consumption growth in China will be 8 percent this year, according to Sydney-based Macquarie Group Ltd. Copper inventories in Asian warehouses monitored by the London Metal Exchange dropped 3.9 percent today, the most since Feb. 19.

``We'll probably see China coming back to buy in the fourth quarter,'' said Gayle Berry, an analyst at Barclays Capital in London. ``We are expecting restocking for copper and aluminum by China consumers.''

Copper for delivery in three months climbed $130, or 1.8 percent, to $7,190 a metric ton as of 10:29 a.m. on the LME. It earlier rose to $7,215, the highest since Sept. 5.

Copper has increased 7.7 percent this year. Consumption outpaced production by 155,000 tons in the first five months this year, the Lisbon-based International Copper Study Group said in August.

Gains will be ``difficult'' to hold without evidence of a pickup in demand in China, Berry said. There are ``increased risks for the second half'' for the global economy, she said.

The average asking price for a U.K. home fell 1 percent this month, the fourth monthly decline as the global credit squeeze intensified, a report by Rightmove Plc showed today.

Total copper inventories dropped 3,100 tons to 206,700 tons, the most since April 18. Inventories in Asian warehouses dropped 4,000 tons to 97,600 tons.

Aluminum advanced $17 to $2,552 a ton. Inventories of the metal increased 15,650 tons to 1.36 million tons.

Lead added $10 to $1,910 a ton and zinc increased $31 to $1,810 a ton. Nickel climbed $350 to $17,300 a ton and tin jumped $350 to $17,300 a ton.

To contact the reporter on this story: Claudia Carpenter in London at ccarpenter2@bloomberg.net or ccarpenter2@bloomberg.net