Copper Advances as Chinese Imports Drive Investor Confidence

By Glenys Sim

May 13 (Bloomberg) -- Copper climbed for a second day in Asia as investors deemed April’s record Chinese imports a sign of improving demand in the world’s top metals consumer.

China’s purchases of copper and copper products reached a record 399,833 metric tons last month, compared with 374,957 tons in March. Still, a deepening slump in the nation’s exports, which declined 22.6 percent in April from a year earlier, capped the metal’s gains.

“Investors are looking at the positive,” Li Jingyuan, an analyst at Haifu Futures Co., said from Shanghai today. “Last year was an unusually good year for exports, so the numbers look weak, but if you look at the aggregate through the past few years, the numbers were actually not bad at all.”

Copper for three-month delivery on the London Metal Exchange rose as much as 0.5 percent to $4,620 a ton and traded at $4,615 at 10:16 a.m. Singapore time. The contract gained as much as 3.3 percent yesterday.

September-delivery metal on the Shanghai Futures Exchange, the most-active contract, added as much as 1.2 percent to 37,160 yuan ($5,447) a ton, before trading up 0.8 percent at 37,020 yuan.

The dollar fell for a fourth day to a two-week low against the yen and declined for a second day versus the euro after the former U.S. comptroller general David Walker wrote in the Financial Times that the U.S. AAA credit rating may be at risk. Dollar-denominated commodities tend to move in the opposite direction to the currency as investors seek alternative holdings.

“Dollar weakness is helping the entire commodities complex move higher,” Li said. “Individually, industrial metals like copper are benefiting from falling inventories and investors buying back their short positions.”

Among other LME-traded metals, zinc gained 0.3 percent to $1,550 a ton and nickel added 0.4 percent to $13,100 a ton. Aluminum was little changed at $1,545 a ton and lead dropped 1 percent to $1,460 a ton. Tin hadn’t traded as of 10:14 a.m. in Singapore.

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