Jan. 17 (Bloomberg) -- Copper rose the most in two weeks as better-than-expected U.S. housing starts and signs that China’s economic recovery is gaining traction bolstered demand prospects in the world’s two biggest users of the metal.
U.S. home-building accelerated 12 percent last month to a 954,000 annual rate, exceeding all forecasts in a Bloomberg survey of economists and capping the best year for the industry since 2008, government figures showed today. Gross domestic product in China probably expanded 7.8 percent in the fourth quarter from a year earlier, up from 7.4 percent in the previous period, economists surveyed by Bloomberg said before a report tomorrow.
“The markets were given some good numbers in the housing starts report, and clearly that’s a number the copper market pays a lot of attention to,” Tim Evans, the chief market strategist at Long Leaf Trading Group in Chicago, said in a telephone interview. “China numbers and U.S. housing are key drivers.”
Copper futures for delivery in March gained 1.5 percent to settle at $3.662 a pound at 1:17 p.m. on the Comex in New York, the biggest increase for a most-active contract since Jan. 2.
The Copper Development Association says construction generates about 40 percent of demand for the metal, used in pipes and wiring.
China’s economy may exit a seven-quarter slowdown as the government rolls out infrastructure projects and limited inflation allows officials to hold off from tightening monetary policy.
Copper stockpiles tracked by the London Metal Exchange declined 1 percent to 345,925 metric tons on drawdowns in New Orleans and Gwangyang, South Korea, daily exchange figures showed.
On the LME, copper for delivery in three months added 1.4 percent to $8,054 a ton ($3.65 a pound).
Aluminum, lead, zinc and nickel also advanced in London. Tin was unchanged.
--Editors: Millie Munshi, Thomas Galatola