Copper surges on hopes of US growth

LONDON: Copper rose for a third day in London on speculation that a government report on Friday will show stronger economic growth in the US, the world’s secondbiggest consumer of the metal.

Expansion sped up to an annual rate of 3.5% in the fourth quarter, according to the median estimate of economists surveyed by Bloomberg News. Prices also gained as inventories of copper tracked by Shanghai’s exchange shrank for a second week.

Markets in China, the biggest copper user, will close for the weeklong Lunar New Year holiday starting on February 2.
“Chinese investors are closing out their positions before the holidays and physical buying is virtually nonexistent, so this will keep a lid on international prices in the very near term,” Zhu Haitao, an analyst at Zhongcai Futures, said from Beijing.

Copper for three-month delivery gained $116, or 1.2%, to $9,557 a tonne at 10:07 am on the London Metal Exchange. The contract is up 1.2% this week. Copper for March delivery added 0.3% to $4.3515 a pound on the Comex in New York. Tin climbed to a record as all of the six main metals traded on the LME advanced.

The Commerce Department figures on US economic growth, the first of three estimates for the fourth quarter, are due at 1:30 pm London time. Gross domestic product expanded at a 2.6% annual pace in the prior three months.

Copper rose this week as figures showed that US new-house sales gained the most since 1992 in per centage terms in December and companies ordered more equipment last month for a second month in a row. China on Thursday approved property-tax trials on some housing in Shanghai and Chongqing, adding to measures to curb real-estate speculation and asset bubbles. The government aims to limit inflation that breached its target in 2010. China’s central bank raised interest rates on December 25.

Copper inventories declined 1,114 tonne to 129,250 tonne, based on a survey of eight warehouses, the Shanghai exchange said on its website.