Copper Rallies With Industrial Metals as Inventories Decline

Jan 02, 2014 3:00 am ET

Jan. 2 (Bloomberg) -- Copper rallied to the highest level since June, leading gains in industrial metals, as inventories continued falling and a manufacturing gauge showed sustained growth in China, the biggest user.

Copper for delivery in three months on the London Metal Exchange climbed as much as 1.3 percent to $7,457.50 a metric ton, the most since June 5, and traded at $7,446.75 by 3:39 p.m. in Shanghai. Prices retreated 7.2 percent last year.

LME copper inventories fell to 366,425 tons on Dec. 31, the lowest level since Jan. 28, while stockpiles monitored by the Shanghai Futures Exchange slipped to the least in almost a year, data from the bourses showed. A Purchasing Managers’ Index for China from HSBC Holdings Plc and Markit Economics came in at 50.5 in December, versus 50.8 the previous month, and a separate gauge compiled by the statistics bureau and logistics federation was 51. Readings above 50 signal expansion.

“Robust demand continues to draw down on stockpiles, not just on the LME but globally,” said Joyce Liu, an analyst at Phillip futures Pte in Singapore.

Copper for delivery in March on the Shanghai Futures Exchange closed 0.8 percent higher at 52,670 yuan ($8,704) a ton. Futures for delivery in March rose 0.6 percent to $3.417 a pound on the Comex in New York.

On the LME, zinc advanced as much as 2 percent, the most since Dec. 20, to $2,096.50 a ton.

--Alfred Cang. Editors: Sungwoo Park, Alexander Kwiatkowski