Copper Climbs in Asia on Peru Strike Threat, Dollar Decline

By Glenys Sim

July 16 (Bloomberg) -- Copper rose for a fifth time in six days in Asia, on expectations of a strike in Peru and as the dollar held near a record low against the euro, raising the appeal of raw materials as an alternative investment.

Copper gained as workers at Freeport-McMoRan Copper & Gold Inc.'s Peruvian copper-mine, the nation's third largest, failed to reach an agreement over issues including better working conditions and may walk out on July 16, a union official said on July 11. The metal has jumped 23 percent this year, partly boosted by supply concerns.

``Fresh reports of mine strike activity in South America and a weak U.S. dollar'' may offset ``concerns about slowing global growth,'' Mark Pervan, a senior commodity strategist with Australia and New Zealand Banking Group Ltd. in Melbourne, said yesterday in an e-mail. ``Copper may be the best supported on expectation Freeport-McMoRan's copper mine workers in Peru will strike.''

Copper for delivery in three months rose $69.25, or 0.9 percent, to $8,214.25 a ton on the London Metal Exchange at 10:44 a.m. in Singapore, after falling as much as 2.1 percent yesterday.

Copper for September delivery lost as much as 530 yuan, or 0.9 percent, to 62,010 yuan ($9,100) a metric ton on the Shanghai Futures Exchange. The most-active contract stood at 62,390 yuan at 10:46 a.m. local time.

The dollar traded at $1.5910 per euro at 10:11 a.m. in Tokyo, after touching $1.6038 yesterday, the weakest since the 15-nation currency's 1999 debut on speculation U.S. banks will report further losses this week, eroding confidence in the financial system of the world's largest economy.

Gains Limited

Limiting copper's gains were concerns about waning demand on falling Chinese imports and a weakening outlook for the U.S. economy. Copper has dropped 8 percent from a July 2 record on speculation a slowdown in global economic growth may erode consumption.

China's imports of copper and alloys slumped 19 percent in June from a year earlier, according to customs data yesterday. U.S. Federal Reserve Chairman Ben S. Bernanke said risks to U.S. growth and inflation have increased.

Among other LME-traded metals, aluminum and zinc were also lifted by the weak dollar and as crude oil stemmed losses from its biggest one-day decline yesterday.

Aluminum rose 0.6 percent to $3,233 a ton, and zinc was up 1.9 percent at $1,875.25. Lead fell 0.3 percent to $1,985, while nickel and tin had not traded as of 10:49 a.m. in Singapore.

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