Copper in Shanghai Advances for Fifth Day as Inventories Drop

By Glenys Sim

June 29 (Bloomberg) -- Copper in Shanghai climbed for a fifth day on optimism that demand may be picking up as global stockpiles decline.

Copper inventories in Shanghai fell 18 percent last week, the first drop in four weeks, the Shanghai Futures Exchange said in a report after the market closed June 26. Stockpiles of the metal tallied by the London Metal Exchange have declined every day since May 7.

“The large drop in inventories certainly lends support to the market,” Zeng Chao, analyst at Everbright Futures Co, said in an e-mail.

October-delivery copper on the Shanghai Futures Exchange, the most-active contract, gained as much as 0.9 percent to 40,740 yuan ($5,962) a metric ton and traded at 40,490 yuan at 10:03 a.m. Singapore time.

Three-month delivery copper on the London Metal Exchange rose as much as 1.8 percent to $5,125 a ton before trading at $5,105 a ton. Copper for September delivery in New York was up 0.6 percent at $2.3235 a pound.

“Copper in the international market will continue to take direction from the U.S. dollar and crude oil,” said Zeng. “In the coming weeks, we may see Shanghai reverting back to tracking London.”

Copper futures in China have led prices in London since April, Gu Jianjun, a trader at Jinyuan Futures Co., a unit of Tongling Nonferrous Metals Group Co., said June 24.

Among other LME-traded metals, aluminum rose 0.4 percent to $1,651 a ton, zinc added 1.2 percent to $1,600 a ton and lead gained 0.3 percent to $1,720 a ton. Nickel was little changed at $15,830 a ton, while tin hadn’t traded as of 10:05 a.m. in Singapore.

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