Copper, Little Changed in Asia, May Drop After Dollar Advances

By Bloomberg News

June 9 (Bloomberg) -- Copper, little changed in Asian trading, may decline as a gain in the dollar eased inflation concerns and equities declined.

The U.S. currency traded near a one-week high versus the euro after investors raised bets the Federal Reserve will increase the target lending rate by the end of the year as the world’s largest economy recovers. The MSCI Asia Pacific Index fell as much as 0.9 percent to 101.44 amid concerns a three- month rally had overvalued earnings prospects.

“Copper remains highly correlated with the dollar and equities,” Zhao Kai, an analyst at Jinrui Futures Co., wrote in an e-mailed report today.

The metal for three-month delivery on the London Metal Exchange traded at $4,983 a metric ton at 12:33 p.m. Singapore time after gaining as much as 1.4 percent to $5,050 a ton.

September-delivery copper on the Shanghai Futures Exchange rose as much as 2.1 percent to 41,340 yuan ($6,047) a ton before declining 0.3 percent to 40,370 yuan at the 11:30 a.m. local time break. July-delivery copper on the Comex division of the New York Mercantile Exchange gained 0.7 percent to $2.268 a pound.

A report later this week will probably show China’s spending on roads, power grids and property accelerated for a fourth month in May as the government stepped up spending to revive the world’s third-largest economy.

Urban fixed-asset investment probably grew 31 percent in the five months through May from a year ago, according to the median estimate of 16 economists surveyed by Bloomberg News.

China is the world’s largest copper consumer.

China Aluminum

Aluminum declined from a six-month closing high in London, losing as much as 1.4 percent to $1,596.75 a ton and last traded at $1,601. China, the world’s largest producer, raised tax breaks on exports of foil in an effort to help companies weather a slump in overseas shipments and sustain growth.

Rebates were raised to 15 percent, the finance ministry said, without providing previous levels. The new rates took effect from June 1. The country restored tax breaks on aluminum plates and strips in November.

Among other LME-traded metals, lead slid 0.8 percent to $1,656 a ton, and tin fell 0.4 percent to $14,840 a ton. Zinc gained 1 percent to $1,560 a ton and nickel was little changed at $14,301 a ton at 11:37 a.m. in Singapore.

--Li Xiaowei, John Liu. Editors: Wendy Pugh, Ravil Shirodkar

To contact Bloomberg News staff on this story: Li Xiaowei in Shanghai at +86-21-6104-7023 or Xli12@bloomberg.net