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Copper Rises in London as Stockpile Drop Boosts Demand Outlook
By Chanyaporn Chanjaroen
June 29 (Bloomberg) -- Copper rose in London, heading for a sixth straight month of gains, as stockpiles dropped to the lowest since November, indicating sustained demand.
London Metal Exchange-monitored copper stockpiles fell 1.1 percent to 267,300 metric tons, the lowest since Nov. 11, the bourse said in a daily report. Industrial output in Japan, the second-largest economy, rose 5.9 percent in April and May, the fastest pace in 56 years, a Trade Ministry survey showed today.
In the long term people are becoming more bullish from the macroeconomic perspective, said Leon Westgate, an analyst at Standard Bank Plc in London.
Copper for delivery in three months added $65, or 1.3 percent, to $5,100 a metric ton by 9:33 a.m. in London. Futures for September rose 0.5 percent to $2.3205 a pound on the New York Mercantile Exchanges Comex division.
Stockpiles also fell 18 percent last week at the Shanghai Futures Exchange in China, the largest user of the metal.
The country may stop buying metals for strategic reserves after purchases so far this year spurred price gains, Caijing magazine reported, citing Yu Dongming, a metals industry official at the National Development and Reform Commission, the top economic planning body.
China has bought 235,000 tons of copper, 590,000 tons of aluminum and 159,000 tons of zinc, the magazine cited Yu as saying at a conference in Beijing on June 26.
Shanghai still climbed for a fifth day. The October- delivery contract, the most active, rose as much as 0.9 percent to 40,740 yuan ($5,962) a ton.
Copper seems to have taken on a role as an inflation hedge from an investment perspective, John Meyer, an analyst at Fairfax Plc, said today by phone from London.
Among other LME metals for three-month delivery, aluminum fell 0.1 percent to $1,642 a ton. Lead slid 0.2 percent to $1,711 a ton and zinc dropped 0.7 percent to $1,569.25 a ton. Tin fell 0.3 percent to $14,750 a ton, and nickel slipped 0.2 percent to $15,770 a ton.
To contact the reporter on this story: Chanyaporn Chanjaroen in London at email@example.com
Last Updated: June 29, 2009 04:51 EDT