Copper Gains From One-Month Low as Leaders’ Vow Eases Europe Debt Concerns

By Jae Hur - Sep 15, 2011 9:10 AM GMT+0700

Copper rebounded after German and French leaders expressed support for Greece remaining in the euro area, easing concern that Europe’s sovereign-debt crisis may crimp commodity demand. Zinc, tin and lead also gained.

Three-month copper on the London Metal Exchange climbed as much as 0.8 percent to $8,698.50 per metric ton and traded at $8,685 at 11:04 a.m. in Tokyo. The metal touched $8,590 yesterday, the lowest price since Aug. 11.

Angela Merkel and Nicolas Sarkozy, the leaders of Europe’s two biggest economies, issued a statement yesterday after they spoke with Greek Prime Minister George Papandreou by phone. Papandreou committed to meet deficit-reduction targets demanded as a condition for an international bailout, it said.

“All markets were under the influence of Europe’s sovereign-debt crisis, and today we saw some optimism from the overnight news,” said Hwang Il Doo, a senior trader at Korea Exchange Bank Futures Co. in Seoul. Labor disputes at copper mines in Indonesia and Peru also supported the market, he said.

China is willing to buy the bonds of nations hit by the debt crisis, Caijing reported on its website yesterday, citing Zhang Xiaoqiang, a vice chairman of the National Development and Reform Commission.

Asian stocks advanced today, lifting the region’s benchmark index from a one-year low. The Standard & Poor’s 500 Index rose 1.4 percent yesterday, rounding off a three-day, 3 percent rally. Still, U.S. data today may show industrial production stalled in August, according to a survey of economists by Bloomberg News.

Mine Strikes

Workers at Freeport-McMoRan Copper & Gold Inc. (FCX)’s Peruvian unit failed to reach a wage agreement and will continue a strike that began yesterday, a union official said. Workers and officials at Freeport’s Sociedad Minera Cerro Verde SAA (CVERDEC1) unit, Peru’s third-largest producer, are scheduled to resume talks today, Mining Federation General Secretary Luis Castillo said.

In Indonesia, about 8,000 non-staff workers at Freeport’s Grasberg mine started a one-month strike, Virgo Solossa, head of organizational affairs at a labor union, said yesterday.

Copper for November delivery on the Shanghai Futures Exchange climbed 0.2 percent to 65,150 yuan ($10,199) per ton at 9:29 a.m. local time.

Zinc rose 0.9 percent to $2,180.75 per ton in London, while tin climbed 0.8 percent to $23,580 per ton and lead rose 0.3 percent to $2,350 per ton. Aluminum gained 0.3 percent to $2,365 per ton, and while nickel fell 0.3 percent to $21,303 a ton.

To contact the editor responsible for this story: Richard Dobson at rdobson4@bloomberg.net