Copper rose in London after a plunge to the lowest level in almost 18 months drew purchases from China, the world’s biggest consumer of the metal.
Chinese buying began April 12 as buyers capitalized on slumping prices, according to Newedge Group SA. Copper’s 14-day relative strength yesterday approached 31, nearing the level of 30 that indicates a potential impending rebound to some analysts who study technical charts. Copper in London has traded lower than metal in the Shanghai market since April 12.
“There is scope for upward movement,” Gayle Berry, an analyst at Barclays Plc in London, said by phone today. “Prices have fallen quite a long way. Whenever you get big price moves, that tends to spark some Chinese buying interest.”
Copper for delivery in three months climbed 1.1 percent to $7,282 a metric ton by 10:42 a.m. on the London Metal Exchange. Prices yesterday touched $7,085, the lowest since Oct. 21, 2011. Copper for delivery in May added 0.5 percent to $3.2885 a pound on the Comex in New York.
LME prices below those in Shanghai give Chinese buyers more incentive to purchase metal in London and sell it at home.
Copper also advanced in London after Rio Tinto Group, the world’s second-biggest mining company, said full-year production of refined metal is set to fall by about 100,000 tons after a wall slide last week at the Bingham Canyon mine in the U.S. Ore production at the site remains suspended, the London-based company said today in a statement.
Figures today will show builders in the U.S. broke ground on new houses at a 930,000 annualized pace in March, the second- strongest rate in more than four years, according to a Bloomberg survey of economists. The Copper Development Association says construction generates about 40 percent of demand for the metal used in pipes and wiring.
Copper stockpiles tracked by the LME, up 91 percent this year to the highest since September 2003, gained 0.1 percent to 611,925 tons on deliveries in New Orleans and Malaysia’s Johor, daily exchange figures showed. Orders to remove the metal from warehouses fell 0.8 percent to 155,375 tons.
Aluminum, tin, zinc, lead and nickel rose in London.
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