Copper Rises in London on Weaker Dollar, Improvement in Japan

By Anna Stablum

Oct. 19 (Bloomberg) -- Copper rose in London as the dollar weakened and the Bank of Japan said the country’s economy, the world’s second-biggest, is rebounding.

The Dollar Index, a six-currency measure of the greenback’s value, fell as much as 0.3 percent after dropping 1.1 percent last week. Speculation about further declines supported prices, Jim Lennon, an analyst at Macquarie Bank Group Ltd. in London, said in a report today. Japan’s economy is improving in all of the nation’s nine areas, the central bank said.

“The commoditization of the dollar is likely to be a theme that continues to be played out over the coming year,” Lennon said. Declines by the currency make dollar-priced metals cheaper for holders of other monies.

Copper for three-month delivery rose $50, or 0.8 percent, to $6,280 a metric ton on the London Metal Exchange at 9:42 a.m. local time. December-delivery copper gained 0.5 percent to $2.86 a pound on the New York Mercantile Exchange’s Comex unit.

The weaker dollar has helped copper to double this year, along with record first-half imports into China, the world’s biggest copper user. Japan ranks fourth. Chinese imports fell in monthly terms in July and August before rising 23 percent in September to 399,052 tons, according to figures on Oct. 14.

“We continue to expect that the market will move back into balance over the next three to six months as ex-China demand recovers and Chinese growth remains very strong,” Lennon said. “We believe any pullback in the copper price will be short- lived and will represent an opportunity to accumulate.”

Inventories of copper in LME-monitored warehouses fell 1,125 tons to 356,725 tons, the first decline in six days.

Among other LME metals for three-month delivery, aluminum was little changed at $1,904.25 a ton and zinc was unchanged at $2,053 a ton. Tin slipped 0.3 percent to $14,500 a ton, nickel rose 0.3 percent to $18,750 a ton, and lead advanced 0.8 percent to $2,220 a ton.

To contact the reporter on this story: Anna Stablum in London at astablum@bloomberg.net