Copper in London Gains for a Third Day; Shanghai Contract Drops

Copper in London climbed for a third day, approaching a 28-month high, after U.S. employment data signaled the recovery is intact and the Federal Reserve eased monetary policy.

Three-month copper on the London Metal Exchange rose as much as 0.9 percent to $8,735 a metric ton, and was at $8,677.75 a ton at 10:55 a.m. in Singapore. Copper advanced to $8,769.50 a ton on Nov. 5, the highest price since July 2008, when the metal reached a record $8,940. December-delivery copper on the Comex in New York gained as much as 0.8 percent to $3.9815 a pound.

“Copper in London and New York are still going up because of investment demand from all the liquidity that’s out there, thanks to the Federal Reserve’s move last week,” Gao Jingsong, an analyst at Hoohy Futures Co., said from Guangdong.

The U.S. central bank said Nov. 3 it will expand stimulus by buying an extra $600 billion of Treasuries to sustain growth in the world’s largest economy. Employment in the U.S. rose in October by 151,000 jobs, the first gain in five months and a climb that exceeded all estimates in a Bloomberg News survey.

“Shanghai is unwillingly trying to keep up,” said Gao. “Demand destruction is taking place in China, seen from rising stockpiles and a widening contango,” said Gao, referring to a situation in which future prices are higher than current costs.

Largest User

Futures in Shanghai declined for the first time in four days as high prices deterred purchases in China, the world’s largest consumer. The metal for February-delivery on the Shanghai Futures Exchange fell as much as 0.9 percent to 66,810 yuan （$10,020） a ton, before trading at 67,210 yuan.

Spot copper in Changjiang, Shanghai’s biggest cash market, traded at a 1,865-yuan-a-ton discount to futures on Nov. 5, the most since April. Copper stockpiles monitored by the Shanghai Futures Exchange stood at 106,851 tons last week, the highest level in two months.

In Chile, workers at the Collahuasi copper mine, the world’s fourth-largest, remained on strike for a third day yesterday after wage talks failed. The mine, owned by Anglo American Plc and Xstrata Plc, is operating “normally,” a spokeswoman said yesterday.

Aluminum in London fell 0.2 percent to $2,448 a ton, zinc dropped 0.5 percent to $2,515.50 a ton, and nickel declined 1.3 percent to $24,150 a ton. Lead advanced 0.2 percent to $2,510 a ton, and tin hadn’t traded.