Copper climbed for a second day in London, extending the biggest weekly advance in six months, on speculation that top user China will take further steps to bolster economic growth.
Chinese Premier Li Keqiang said in a statement the country has policies in reserve to deal with any economic volatility this year and can’t ignore “difficulties and risks” from a slowdown in the economy. Copper also gained as traders were making purchases to cover their short positions, or bets on falling prices, according to VTB Capital.
“The market is expecting a wider stimulus by Beijing especially should numbers continue to disappoint,” Andrey Kryuchenkov, an analyst at VTB Capital in London, said by e-mail today.
Copper for delivery in three months rose 1.3 percent to $6,644 a metric ton by 9:56 a.m. on the London Metal Exchange. The metal is up 2.6 percent this week, the most since Sept. 20. Copper for May delivery added 1.4 percent to $3.0335 a pound on the Comex in New York, where futures trading volumes were 32 percent higher than the average for the past 100 days for this time of day, according to data compiled by Bloomberg.
Copper is still down 5.2 percent this month, set for the biggest such drop since June, amid concerns about slowing demand in China. Stockpiles monitored by the Shanghai Futures Exchange dropped 16,176 tons, or 7.7 percent, to 193,725 tons, a second weekly decline, according to bourse data today.
“This Shanghai drop in stocks may be one of the reasons why copper went up overnight,” Herwig Schmidt, head of sales at Triland Metals Ltd. in London, said by phone today.
Freeport-McMoRan Copper & Gold Inc. is producing at about 50 percent of capacity at Indonesia’s Grasberg, the world’s second-biggest copper mine. A company controlled by Rio Tinto Group cut its forecast for output from Mongolia’s Oyu Tolgoi. Copper has declined 10 percent this quarter, heading for the first such loss since the period ended in June.
“Supply seems to be somewhat tight,” Daniel Briesemann, an analyst at Commerzbank AG in Frankfurt, said by e-mail today.
Nickel, aluminum, zinc, tin and lead also climbed.