June 26 (Bloomberg) -- Copper advanced to a four-week high as stockpiles in major exchanges declined and amid speculation the U.S. economy will rebound from a worse-than-estimated contraction in the first quarter.
The contract for delivery in three months on the London Metal Exchange rose as much as 0.5 percent to $6,951.25 a metric ton, the highest since May 28, and traded at $6,940 by 11 a.m. in Tokyo. The metal is up 4.4 percent this quarter, the most since September. Copper in New York extended gains in its longest rally since 2005.
Inventories monitored by the main exchanges in London, Shanghai and New York have plunged 51 percent this year to the lowest level since October 2008. U.S. data today may show jobless claims dropped and personal spending increased, stoking optimism the economy may snap back from the biggest contraction in growth in five years in the first quarter. The country is the world’s second-biggest copper user.
“Copper was getting a boost from shrinking stockpiles and the dollar’s weakness after the revised U.S. gross domestic product data in the first quarter,” said Kazuhiko Saito, an analyst at Fujitomi Co., a commodities broker in Tokyo. “Investors see the U.S. economy is getting better after contracting in the first quarter following bad weather.”
The world’s biggest economy shrank an annualized 2.9 percent in the first three months, more than forecast and the worst reading since 2009, after a previously reported 1 percent drop, the Commerce Department said yesterday.
In New York, futures for delivery in September rose for a 10th day, adding 0.1 percent to $3.1705 a pound. The metal for delivery in September increased 0.8 percent to 49,520 yuan ($7,948) a ton on the Shanghai Futures Exchange.
On the LME, lead also climbed, while aluminum, nickel, tin and zinc were little changed.