Feb. 7 (Bloomberg) -- Copper rose for a second day, heading for a weekly advance, as stockpiles declined and biggest-user China returned from Lunar New Year holidays.
The contract for delivery in three months on the London Metal Exchange climbed as much as 0.4 percent to $7,155.75 a metric ton and traded at $7,139 at 3:22 p.m. Hong Kong time. Prices climbed 1.1 percent this week, the first gain since the period ended Jan. 17.
Stockpiles monitored by the LME shrank for a 15th day to 309,250 tons, the lowest since December 2012, exchange data showed yesterday. Chinese buyers returned as week-long holidays ended today, underpinning physical demand for the metal.
“With Chinese traders returning, liquidity for copper has increased and expectation of post-holiday demand lent support,” said Chae Un Soo, a metals trader at Korea Exchange Bank Futures Co. in Seoul. The market was also supported by dwindling LME stockpiles and tight supplies, he said.
The metal for immediate delivery settled at $48.5 a ton above the three-month LME contract yesterday, the widest backwardation since Jan. 21. Higher prices for earlier deliveries usually signal limited supplies.
On the Shanghai Futures Exchange, copper for April delivery added 0.2 percent to close at 51,030 yuan a ton ($8,417). The metal for delivery in March on Comex in New York rose 0.4 percent to $3.2425 a pound.
On the LME, zinc, lead, nickel and tin all advanced. Aluminum was little changed.
--Editors: Jarrett Banks, Ovais Subhani