Copper Prices Climb on Bets Chinese Demand Will Remain Robust

Copper prices rose in London on speculation that consumption in China, the world’s biggest metal user, will remain robust.

China has boosted borrowing costs three times since mid- October, partly to damp inflation, and copper has climbed 17 percent in the period. Today, the central bank raised reserve ratios for lenders by half a percentage point, 10 days after an interest-rate increase.

“China took measured steps as opposed to drastic measures,” said Frank McGhee, the head dealer at Integrated Brokerage Services LLC in Chicago. “That led people to believe the rally can continue.”

Copper for delivery in three months rose $55, or 0.6 percent, to $9,860 a metric ton （$4.47 a pound） at 6:55 p.m. on the London Metal Exchange. On Feb. 15, the metal reached a record $10,190. The price fell 1 percent this week.

“Raising the reserve-requirement ratio is not the same as hiking interest rates,” said Daniel Briesemann, an analyst at Commerzbank AG in Frankfurt. “In past months, any price dip following monetary tightening in China was short-lived. It remains to be seen whether it’s different this time.”

Copper also gained as the dollar fell for the fourth straight day against a basket of major currencies, boosting the appeal of commodities as an alternative investment, McGhee said.

In New York, copper futures for May delivery fell 0.1 cent to $4.496 a pound on the Comex.

Tin, lead, nickel, zinc and aluminum rose in London. (source from:Bloomerg)