Copper Resumes Advance in London on Outlook for Growth in China

By Claudia Carpenter

Feb. 6 (Bloomberg) -- Copper and aluminum rose in London, resuming this week’s climb, on speculation government spending in China will speed growth and revive demand. Both metals pared gains after a report showed the U.S. lost more jobs.

Gross domestic product in China probably will expand at an annual rate of 12 percent in the current quarter after shrinking by 2.3 percent in the fourth quarter, Deutsche Bank AG forecast today in a report. A second monthly gain by an index of Chinese manufacturing in January has helped copper to climb 11 percent this week and aluminum to add 8.2 percent.

There is “increased optimism over the condition of Chinese industrial demand,” Joel Crane, an analyst at Deutsche Bank in New York, wrote in the report. “Monetary and fiscal stimulus, coupled with inventory restocking, is prompting a temporary growth recovery in China this quarter.”

Copper for delivery in three months climbed $170, or 5.1 percent, to $3,500 a metric ton at 1:55 p.m. on the London Metal Exchange after adding as much as 6.5 percent earlier. Aluminum gained $27, or 1.9 percent, to $1,460 a ton, paring an advance of as much as 3.1 percent. Both metals fell yesterday after rising in the prior three sessions.

Prices for copper are likely to rebound on demand from Asia, said Zambian Vice President George Kunda at a mining conference in Livingston, Zambia.

U.S. companies cut 598,000 jobs in January, the Labor Department in Washington said. Economists forecast a drop of 540,000 jobs, the median estimate in a Bloomberg News survey.

The three-month nickel contract rose $224, or 2 percent, to $11,674 a ton. Nickel, used in stainless steel, has dropped 57 percent in the past year. Posco, Asia’s biggest stainless-steel maker, cut prices as much as 14 percent this month to reflect lower raw-material costs and spur demand.

Lead increased $26, or 2.3 percent, to $1,171 a ton, and zinc gained $16, or 1.4 percent, to $1,159 a ton. Tin rose $365, or 3.4 percent, to $11,170 a ton.

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