Base metals bounce back

Copper jumped to the highest in almost 10 months in London, New York and Shanghai on optimism a global economic recovery will boost demand for the metal used in construction and automobiles.

Three-month delivery copper in London added as much as 1.8 per cent to $5,619 (Dh20,632) a metric tonne, the highest since October 7, and traded at $5,617 in Singapore. Copper for September delivery in New York gained 1.7 per cent to $2.5635 a pound, the highest for a most-active contract since October 8.

Copper for November delivery on the Shanghai Futures Exchange gained as much as 2.9 per cent to Y44,980 (Dh24,184) a tonne, the highest since October 8, and traded at Y44,810.

Copper has led an advance in industrial metals this year, gaining 82 per cent on the London Metal Exchange as stimulus plans by governments including the US and China spurred raw-material purchases.

"There's so much optimism floating around about economic recovery and investors have very little interest in stopping the current rally," said Pan Jinghua, analyst at Shanghai Jinpeng International Futures.

Copper is often used as an indicator for the world economy and may set the pace for other base metals because more than 50 pounds (23kg) of copper is used in an average car and an average of 439 pounds is used in a 2,100-square-foot (195 sq m) home, according to the New York-based Copper Development Association. Other base metals also rallied as November-delivery aluminium in Shanghai gained as much as 3.7 per cent to Y14,765 a tonne, the highest since October 6, while zinc for November delivery added as much as 2.5 per cent to Y14,515 a tonne, the highest since September 5.

"The funds just keep pouring money into the market as investors are encouraged by the steps the Chinese Government is taking to revive the economy and the continued commitment to growth," Zeng Chao, analyst at Everbright Futures, said from Shanghai.

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