Copper in London Climbs as Mubarak Resignation Boosts Sentiment

Feb. 14 （Bloomberg） -- Copper climbed for a third day in London after Egyptian President Hosni Mubarak resigned, easing concern that political instability will spread and weigh on economic growth.

Three-month copper on the London Metal Exchange gained as much as 0.8 percent to $10,038 a metric ton and was at $10,020.50 at 11:42 a.m. in Singapore. The metal also rose after data showed Japan’s economy shrank 1.1 percent in the fourth quarter, less than the 2 percent drop that economists were expecting. Aluminum, zinc and lead climbed.

“The market is very sentiment-driven right now and as the crisis in Egypt seems to be resolved, this is viewed as a positive thing,” Pan Jinghua, an analyst at Citic Futures Co., said from Shanghai. “Economic data on the whole seems to be improving and this helps lift the mood in the market as well.”

May-delivery metal on the Shanghai Futures Exchange gained as much as 1 percent to 76,250 yuan （$11,560） a ton and ended the morning at 76,030 yuan. Futures in New York climbed by as much as 0.9 percent to $4.5785 a pound and last traded at $4.5710 a pound.

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.

‘Strong Pricing’

“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.

Aluminum in London rose 1 percent to $2,519 a ton, zinc gained 0.5 percent to $2,477 a ton, and lead increased 0.7 percent to $2,579 a ton. Nickel climbed 0.2 percent to $28,350 a ton, while tin was little changed after climbing to a record $31,800 a ton on Feb. 11.