Copper Advances to a Two-Week High on Signs of Strengthening Confidence
Wednesday, 29 February 2012 | 00:00
Copper rose to a two-week high in London on signs consumer confidence is strengthening and gains by the euro after German legislators approved a second bailout for Greece.
A gauge of confidence in Germany will reach a 12-month high in March, GfK SE said. The country was the world’s third-biggest copper consumer in 2010, according to researcher CRU. Figures today may show U.S. consumers are more confident, according to a Bloomberg News survey of economists. The euro advanced as much as 0.5 percent against the dollar.
“The metals remain buoyant for now, lifted by a weaker dollar, good economic data and less concern over EU debt now that Greece’s second bailout seems to be making progress,” William Adams, an analyst at Basemetals.com, said in a report. “With the good news flows, there seems little to unnerve the markets, and therefore the steady tone seems set to continue.”
Copper for three-month delivery climbed as much as 0.7 percent on the London Metal Exchange to $8,595.75 a metric ton, the highest level since Feb. 10. Prices were up 0.3 percent at $8,560 by 10:03 a.m. local time. May-delivery copper rose 0.3 percent to $3.899 a pound on the Comex in New York.
Prices also gained as euro-area confidence in the economic outlook improved more than economists forecast. The Conference Board’s gauge of U.S. consumer sentiment, due at 3 p.m. London time, climbed to 63 this month, the survey showed. Still, another report set for release 90 minutes earlier may show U.S. orders for durable goods fell for the first time in four months.
“U.S. durable goods this afternoon will be closely watched,” said Leon Westgate, an analyst at Standard Bank Plc in London.
Advances by the euro against the dollar make metals priced in greenbacks cheaper for users of the single European currency.
Prices also increased as China’s money-market rate touched a three-week low on speculation the supply of cash is increasing since a reduction in banks’ reserve ratios took effect. The country is the biggest global copper consumer.
China relaxed lending curbs on local government financing vehicles to help prevent default risks as the peak period for loan repayments approaches, the China Securities Journal reported, citing unidentified participants in a meeting held by the banking regulator.
Copper stockpiles monitored by the LME, down 19 percent this year, declined 0.5 percent to 298,850 tons, reaching the lowest level since August 2009, daily exchange figures showed. Canceled warrants, or orders to remove the metal from the warehouses, gained 1.2 percent to 88,875 tons.
Lead for three-month delivery on the LME gained 0.6 percent to $2,261 a ton and aluminum advanced 0.5 percent to $2,343 a ton. Zinc rose 0.8 percent to $2,115 a ton, nickel added 0.4 percent to $20,236 a ton and tin climbed 1.5 percent to $24,050 a ton.