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Copper rises by 10% on increased demand from Chinese market

Copper rises by 10% on increased demand from Chinese market

Copper advanced in Asia on expectations Chinese demand will absorb recent gains in global stockpiles, and as investors bought raw materials as an alternative to a declining dollar.
Copper stockpiles in warehouses monitored by the London Metal Exchange were little changed after climbing by 13,850 metric tons, or 10 percent, in the previous three days. Imports of refined copper and alloys into China gained 7.1 percent in January from a year earlier, the customs office said February 22.
"March and April are high consumption months in China and investors are expecting this demand to work off the current high inventory levels," Wang Pengzhen, an analyst at Zhongda Futures in Zhejiang, said yesterday.
May-delivery copper in Shanghai rose as much as 3.8 percent to 69,210 yuan (US$9,684) a ton, and stood at 68,540 yuan a ton at the 11:30 a.m. local time break yesterday.
Metal for immediate delivery in Changjiang, Shanghai's biggest cash market, gained as much as 1.8 percent to 67,800 yuan a ton yesterday.
London Metal Exchange three-month copper traded 1.2 percent higher at US$8,375 a ton at 12:45 p.m. Shanghai time yesterday, and copper for May delivery on the Comex division of the New York Mercantile Exchange rose 1 percent to US$3.83 a pound.
Gains in energy, precious metals and agricultural commodities helped to prop up the base metals complex as "funds continue to buy into commodities as a whole", said Wang Fei, an analyst at Maike Futures Co. in Shanghai.
Gold rose to its highest ever, silver gained to a 27-year high, and crude oil traded near its record as the dollar declined to an all-time low against the euro, increasing demand for alternative assets.
Supplies of zinc, the metal used to galvanize steel, will exceed demand for at least the next three years, accelerating a price decline from record highs in 2006, analysts said at a conference in Arizona yesterday.
Earlier this month, zinc jumped the most in nine months after power shortages in China reduced output. China's drop in zinc production following winter storms was "not that significant," according to CHR Metals Ltd., a lead and zinc research company.
Yunnan Chihong Zinc and Germanium Co., China's fifth-largest zinc producer by capacity, said yesterday that production, which was partially halted since February 11, resumed on February 23.
Shanghai zinc for May delivery gained 1.7 percent to end the morning at 20,775 a ton, and zinc for delivery in three months on the LME traded up 0.6 percent at US$2,510 a ton at 12:48 p.m. in Shanghai yesterday.
Aluminum in Shanghai rose 1.3 percent to close the morning session at 19,905 yuan a ton, and LME aluminum added 0.8 percent to US$2,999 a ton.