Copper set for best quarter since '06

Copper rose on the London Metal Exchange, heading for its best quarter in almost three years, as the dollar fell and European stock markets rebounded.

The Dollar Index, which tracks the currency against six counterparts, slid as much as 0.9 per cent after three days of gains. Declines by the dollar reduce the cost of commodities priced in the currency for holders of other monies. The Dow Jones Stoxx 600 Index of European shares added as much as 2.4 per cent, and futures on US stock indexes advanced.

“Dollar weakness and somewhat friendlier equity markets in Europe are helping metals higher,” Eugen Weinberg, an analyst at Commerzbank AG in Frankfurt, said by telephone.

Copper for three-month delivery rose $160, or 4.1 per cent, to $4,070 per tonne, rebounding from yesterday’s 3.5 per cent drop. The metal has added 33 per cent this year in LME trading, poised for its best quarter since the three months through June 2006, and reached a four-month high of $4,168 on March 27.

The metal has gained in 2009 on optimism that demand may improve as governments and central banks spend trillions of dollars in an effort to stimulate economies and combat the worldwide economic slowdown. The US government and the Federal Reserve have spent, lent or guaranteed $12.8 trillion, an amount nearing the value of everything produced in the country last year.

LME-monitored stockpiles of copper, used in plumbing and electrical wiring, fell 1,775 tonnes to 499,625 tonnes.

Metal earmarked for delivery represented 5.3 per cent of the total.

Aluminum for three-month delivery rose $15, or 1.1 per cent, to $1,409 a tonne. LME-monitored stockpiles slipped 0.3 per cent from yesterday’s record 3.48 million tonnes.

“We are seeing a tremendous increase in inventories, but the growth of the buildup is slowing down and we are seeing the effect of capacity curtailments,” Svein Richard Brandtzaeg, Norsk Hydro ASA’s chief executive officer, said yesterday in an interview. The Oslo-based company is Europe’s second-largest producer of aluminum.

Makers of the lightweight metal, used in industries from packaging to aerospace, have cut 6 million tonnes of worldwide capacity, or 13 per cent of the global total, according to Citigroup Inc.

Nickel fell $55, or 0.6 per cent, to $9,520 a tonne. LME- monitored inventories of the metal, used mostly to make stainless steel, have risen 35 per cent this year to 106,698 tonnes. Nickel’s price has slid 19 per cent in 2009, the most among metals traded on the exchange.

Lead added $31, or 2.5 per cent, to $1,281 a tonne, extending this year’s gain to 28 per cent, the second-biggest on the LME after copper.

Zinc rose 1 per cent to $1,328.25 a tonne, and tin climbed 0.2 per cent to $10,325 a tonne.