Shanghai Copper Rises From 10-Month Low on Tight Local Supply

By Li Xiaowei

Sept. 17 (Bloomberg) -- Copper rebounded from a 10-month low in Shanghai as tight domestic supplies supported prices in China, the world's largest consumer of the industrial metal.

Futures in London also gained after falling to the lowest price since January as turmoil in financial markets fueled speculation that economic growth will stagnate, eroding demand for raw materials. China imports of copper and alloys rose 9.5 percent to 101,317 metric tons, over the previous month, customs data showed yesterday.

``Domestic supplies are very tight,'' Li Rong, an analyst at Great Wall Futures Co. said today by phone from Shanghai. ``This is going to act like a temporary brake on Shanghai copper which is prone to further declines amid global financial market turmoil.''

Copper for December delivery rose as much as 1.6 percent to $54,050 yuan ($7,899) a ton on the Shanghai Futures Exchange and traded at 53,710 yuan at 10:39 local time. The metal fell by the exchange-imposed daily limit yesterday to the lowest since November 2007.

Copper for three-month delivery rose 0.2 percent to $6,885 a ton on the London Metal Exchange at the same time.

Other commodities including gold and oil rebounded after the U.S. government pledged up to $85 billion to rescue American International Group Inc. Asian stocks also gained, helping the regional benchmark index rebound from the steepest plunge in eight months.

Among LME-traded metals, aluminum was 0.7 percent higher at $2,548.5 a ton, zinc dropped 0.2 percent to $1,745, nickel rose 0.7 percent to $17,520, lead and tin were un-traded in Asia.

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