Copper Gains in Shanghai After China’s December Imports Jump

By Glenys Sim

Jan. 14 (Bloomberg) -- Copper futures rose in Shanghai as imports into China, the world’s largest consumer of the metal used in electrical wiring and pipes, jumped last month.

Copper advanced after imports gained 32 percent in December to 286,576 metric tons, the Beijing-based customs office said yesterday, citing preliminary data.

“The number yesterday was on the high side but expectations for imports this year are still going to be lower, and this will keep any rally in check,” Li Jingyuan, an analyst at Haifu Futures Co. said today from Shanghai.

Copper for March delivery on the Shanghai Futures Exchange, the most active contract, closed 5 percent higher at 27,700 ($4,054) a ton. London Metal Exchange copper traded down 0.3 percent at $3,360 a ton, after rising as much as 1.2 percent earlier.

China imported 2.6 million tons of copper and the metal’s products last year, down 5 percent from 2007, the customs office said, citing preliminary data.

Still, weakening demand signaled by rising stockpiles will continue to limit copper’s gains, said Li. Inventories tallied by the London Metal Exchange climbed to a five-year high of 374,850 tons yesterday.

March delivery zinc in Shanghai gained as much as 5 percent to 11,295 yuan a ton, before ending the day at 11,130 yuan. LME zinc lost 1 percent to $1,292.5 a ton at 3:55 p.m. in Singapore.

Zinc Purchase

China, the world’s largest producer and consumer of zinc, will buy a less-than-expected 59,000 tons of the metal from domestic smelters to support the industry after prices plunged, two company executives said.

China’s State Reserve Bureau will buy zinc at 11,800 yuan a ton, said the executives after a meeting in Beijing with the agency today. The bureau had sought to buy 96,000 tons, and a lack of stock held by smelters at the meeting curbed the purchase plan, one executive said.

“It’s less than the market was expecting, but perhaps this could be the first of many purchases,” said Pang Ying, analyst at Shenzhen Rongtuo Trading Co.

Among other LME-traded metals, nickel lost 2.4 percent to $11,000 a ton, aluminum was up 0.8 percent at $1,527, lead added 0.6 percent to $1,300, and tin gained 1.3 percent to $11,750 as of 3:26 p.m. in Singapore.

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