Copper, Zinc Gain as Ireland Bailout Offsets Korea Tension

Copper gained after Europe agreed to a bailout for Ireland, outweighing tensions on the Korea Peninsula. Aluminum and zinc also increased.

The metal for three-month delivery rose as much as 1.4 percent to $8,355.75 a metric ton on the London Metal Exchange and traded at $8,325 at 2:39 p.m. in Shanghai. Three-month zinc advanced 2.2 percent to $2,150.50 a ton.

“As the Ireland debt crisis dissipates, copper has found some support,” Wu Jianjian, an analyst at Yong’an Futures Co., said by phone from Hangzhou.

European government officials, meeting yesterday in Brussels, agreed on offering Ireland an 85 billion-euro （$113 billion） lifeline, while scaled back proposals to saddle bondholders with losses in future budget crises.

The Dollar Index, which tracks the greenback against the currencies of six major U.S. trading partners, erased earlier gains, and traded little changed at 80.352 as of 2:41 p.m. in Singapore. Asian stocks advanced, with the MSCI Asia Pacific Index climbing 0.5 percent to 129.57.

Rio Tinto Group, the world’s third-largest mining company, expects demand for some metals, including iron ore and copper, will double over the next 15 years to 20 years, Chief Executive Officer Tom Albanese said today. Demand will be driven by the increasing modernization of developing nations, he said.

In Chile, Anglo American Plc and Xstrata Plc’s Collahuasi venture in northern Chile continues to operate normally as a strike at the world’s fourth-largest copper mine entered a fourth week. The company is employing non-union employees and contract workers, while it negotiates individually with union members, a spokeswoman said on Nov. 26.

Speculation Curb

In China, the world’s largest metals consumer, Shanghai Futures Exchange will start to increase margins after the market closes today. The rates on copper, aluminum, steel wire, gold and fuel oil futures will rise to 10 percent, steel-reinforcing bars and zinc to 12 percent, and rubber to 13 percent.

The bourse will also widen the daily price-move limits for all products to 6 percent.

“The latest measure seemed to have damped market participants’ trading interest,” Wu said.

Copper for March delivery in Shanghai increased 1.3 percent to close at 62,440 yuan （$9,362） a ton.

South Korean President Lee Myung Bak told visiting Chinese State Councilor Dai Bingguo yesterday in Seoul the time isn’t right to resume six-party talks with North Korea, Yonhap News said. Lee said today to make Kim Jong Il’s regime pay for military attacks after it shelled a South Korean island, killing four people.

Aluminum in London gained 0.4 percent to $2,280 a ton, and lead added 1.2 percent at $2,307 a ton. Tin increased 0.4 percent to $24,300 a ton, while nickel advanced 1.2 percent to $22,830 a ton.

--Helen Sun. Editors: Richard Dobson, Ravil Shirodkar.