Copper Advances as China Boosts Imports; Tin Climbs to Record

Copper climbed for a third day in London as China’s imports unexpectedly climbed, boosting consumption prospects in the world’s largest metals user. Tin advanced to an all-time high.

Three-month copper on the London Metal Exchange gained as much as 0.9 percent to $10,047 a metric ton and was at $10,046.75 at 2:50 p.m. in Singapore. The metal extended gains after data showed China’s January exports increased 38 percent, higher than all 22 economists’ forecasts in a Bloomberg News survey and compared with the median estimate of 23 percent.

Copper also rose as Japan’s economy shrank 1.1 percent in the fourth quarter, less than the 2 percent drop that economists were expecting, adding to signs economic recovery outside China is gathering pace.

“Economic data on the whole seems to be improving and this helps lift the mood in the market as well,” Pan Jinghua, an analyst at Citic Futures Co., said from Shanghai.

May-delivery metal on the Shanghai Futures Exchange gained as much as 1 percent to 76,250 yuan ($11,560) a ton, before trading at 76,100 yuan. Futures in New York climbed by as much as 1 percent to $4.583 a pound and last traded at $4.5805.

China imported 364,240 tons of copper and its products in January, compared with 344,560 tons in December and 292,100 tons in January 2010. A rise in Chinese January copper imports would be surprising and, more importantly for metal traders, bullish, Citigroup Inc. analysts including David Thurtell said Feb. 7.

“There was very little stockpiling activity among fabricators at the end of last year, however inventories on hand have practically been depleted,” Liang Lijuan, an analyst at Cofco Futures Co., said from Beijing. “As they ramp up production after the Lunar New Year, they don’t have much choice except to re-stock.”

High Prices

Rio Tinto Group, the world’s third-largest mining company, forecast that high copper prices will continue amid rising demand and before output from new projects eases a supply shortfall. The International Copper Study Group predicts a 435,000-ton deficit this year.

“We will see a continued period of strong copper pricing, largely because many of the large mines, including our own, are seeing declining grades, deepening pits,” Tom Albanese, chief executive officer of London-based Rio Tinto, told Australian Broadcasting Corp.’s “Inside Business” television program.

Copper, which reached a record $10,160 a ton on Feb. 7, fell for the first week in three last week after China increased borrowing costs for the third time in four months, adding to tightening measures that also include raising the amount of deposits banks must hold in reserve.

Tin in London climbed 0.2 percent to a record $31,850. Aluminum rose 1 percent to $2,519 a ton, zinc gained 0.7 percent to $2,481.50 a ton, lead increased 1.5 percent to $2,597 a ton and nickel climbed 1 percent to $28,575 ton.

(Source: http://www.bloomberg.com/news/2011-02-14/copper-advances-for-a-third-day-as-mubarak-resignation-boosts-sentiment.html)