Copper Rises From One-Month Low in London on Signs of Buying

By Li Xiaowei

Feb. 23 (Bloomberg) -- Copper rose from the lowest close in a month in London amid signs that price declines driven by the global recession may have encouraged buying of the metal.

Canceled warrants, or metal booked for withdrawal from London Metal Exchange-monitored warehouses, jumped 52 percent to 19,075 metric tons on Feb. 20, with the greatest increase in Asia. China’s January refined copper imports were 41 percent more than a year earlier, even after declining 15 percent from December.

“The jump in cancelled warrants implies buying occurred,” Zhao Kai, an analyst at Jinrui Futures Co., said from Shenzhen. “After last week’s rebound ended, we deem $3,050 to be next support level for London copper.”

Copper for three-month delivery on the LME rose as much as 2.7 percent to $3,235 a ton before trading at $3,225 a ton at 10:57 a.m. in Shanghai. The metal dropped to $3,150 on Feb. 20, the lowest closing price since Jan. 22.

Copper for May delivery on the Shanghai Futures Exchange advanced 0.5 percent to 26,670 yuan ($3,902).

Metals in London also rose after the dollar dropped, reducing the purchasing cost for holders of other currencies. The dollar fell after the Wall Street Journal reported that Citigroup Inc. is holding talks with federal government officials that may increase the government’s ownership of the bank.

Among other LME-traded metals, aluminum was up 0.2 percent at $1,308 a ton, zinc added 0.4 percent to $1,109, nickel rose 1.8 percent to $9,675 and tin gained 0.5 percent to $10,575.

To contact the reporter for this story: Li Xiaowei in Shanghai at xli12@bloomberg.net