Metalnewsnet 26 Jan:

Copper prices rose for a second session on speculation that global demand is strengthening for the metal used in pipes and wires.

A government report showed European industrial orders increased 2.7 percent in November, signaling consumption by manufacturers may rise. Copper may gain to a record this year, driven by rising industrial use in China, the world’s biggest metals buyer, according to HFZ Capital Management Ltd. Prices more than doubled in 2009 as the global recovery boosted demand.

“The copper rally has been China-driven, and there’s confidence that the demand situation is still positive,” said Gijsbert Groenewegen, a partner at Gold Arrow Capital Research in New York. “The real test is going to come in the second quarter to see if the higher prices are sustainable.”

Copper futures for March delivery added 4.6 cents, or 1.4 percent, to $3.393 a pound on the Comex division of the New York Mercantile Exchange. On the London Metal Exchange, copper for delivery in three months rose 1 percent to $7,465 a metric ton ($3.39 a pound).

Prices on the LME may advance to $10,000 a ton this year, Shen Haihua, an investment manager at HFZ Capital Management, said at a conference in Shanghai. The metal climbed to a record $8,940 in July 2008.

Weaker Dollar

Copper also gained today as a weaker dollar boosted demand from investors seeking an alternative investment, Edward Meir, an analyst at MF Global Ltd. in Darien, Connecticut, said in a report. The dollar fell as much as 0.3 percent against a basket of six major currencies.

Inventories in warehouses monitored by the LME dropped for the fourth time in six sessions, after touching a 10-month high on Jan. 21, which may signal improved demand. Stockpiles fell 800 tons to 533,400 tons, according to the exchange’s daily warehouse report. They declined 450 tons on Jan. 22. “We’re hearing good things about automobile demand in Europe,” said David Thurtell, an analyst at Citigroup Inc. in London.

Aluminum and tin prices also rose in London. Nickel, lead and zinc fell.

(From Bloomberg)