Copper rose for a second day on speculation a recovery in demand in top users China and the U.S. will help absorb an oversupply.
The metal for delivery in three months gained as much as 0.2 percent to $8,250.75 a metric ton on the London Metal Exchange, after closing 0.5 percent higher yesterday. The contract traded at $8,250 a ton as of 10:11 a.m. in Singapore. Futures for March delivery were little changed at $3.748 a pound on the Comex in New York.
The Standard & Poor’s 500 Index climbed 6.5 percent this year through yesterday as about 74 percent of the 354 companies in the equity gauge that have released results during the earnings season exceeded profit projections, data compiled by Bloomberg show. A government-backed survey of purchasing managers showed manufacturing in China expanded in January, and a separate gauge from HSBC Holdings Plc and Markit Economics rose to the highest in two years, signaling the recovery may be gaining momentum.
“Copper will benefit from the macro-economic recovery in the major consuming countries,” Daniel Hynes, head of commodity strategy at CIMB Securities Australia Lid., said today by phone from Sydney.
Copper stockpiles monitored by the LME, the Shanghai Futures Exchange and Comex gained to 664,396 tons as of yesterday, the highest since May 2011 and almost a 13 percent climb in the year to date, according to data tracked by Bloomberg news. While the market may see the first annual oversupply since 2009, an expected demand increase in China and the U.S. will help absorb the glut, Hynes said.
Financial markets are closed this week in China for the Lunar New Year holiday. Copper imports by China advanced 2.9 percent last month from December.
LME lead for three-month delivery added 0.6 percent at $2,428 a ton, zinc advanced 0.4 percent to $2,218 a ton and while aluminum rose 0.2 percent to $2,124. Nickel fell 0.1 percent.
To contact the reporter on this story: Chanyaporn Chanjaroen in Singapore at firstname.lastname@example.org
To contact the editor responsible for this story: James Poole at email@example.com