Copper Advances in New York, London as Economic Data Improves

July 24 (Bloomberg) -- Copper rose to a nine-month high in New York and London as a German business confidence report buoyed speculation that demand will rebound. Aluminum rose to the highest in almost eight months. The Ifo institute in Munich said its business climate index, based on a survey of 7,000 executives, increased to 87.3 in July from 85.9 in June. Stockpiles of aluminum in warehouses monitored by the London Metal Exchange fell for a second day, from a record 4.56 million metric tons on July 22. “We’ve had a shift in sentiment over the past couple of weeks with stronger-than-expected corporate earnings and improved economic data,” Nicholas Snowdon, an analyst at Barclays Capital, said by phone. Copper futures for September delivery reached $2.544 a pound, the highest since Oct. 8, on the New York Mercantile Exchange’s Comex division. The contract traded at $2.529 as of 8:37 a.m. in New York. Copper for delivery in three months added $15, or 0.3 percent, to $5,545 a ton on the LME. Copper headed for a second straight weekly gain, aided by mine disruptions in Chile. Xstrata Plc reported damage at the Collahuasi mine this week, and a union leader said on July 22 that production would probably drop. Chile is the world’s biggest copper producer. “We now see upside risk to our second half 2009 estimate of $1.80 a pound ($3,968 a ton),” Alan Heap, a Citigroup Inc. analyst, wrote in a report. “We remain positive for 2010 and expect prices to reach $3 a pound in the second half of 2010.” Aluminum Advances Aluminum for delivery in three months climbed as much as $28, or 1.6 percent, to $1,813 a ton on the LME, the highest since Nov. 27. About 2 million tons of aluminum stockpiles are tied up in financing transactions, “so that means the market is a lot tighter than what the nominal inventory level would suggest,” Barclays’ Snowdon said. Aluminum inventories have climbed 3.5 percent this month after rising throughout the past year. About 75 percent of inventory “is unavailable for immediate delivery to consumers, meaning that prices can push higher in the short term despite this inventory overhang,” Dan Smith, an analyst at Standard Chartered Plc in London, said in a report yesterday. Aluminum’s gain is partly on the “increasing likelihood” that the U.S. will move out of recession by the end of the current quarter, Deutsche Bank AG said in a report today. “Since last year, the U.S. has been responsible for 40 percent of the rise in aluminum inventories.” Among other LME metals for three-month delivery, tin advanced 1.5 percent to $14,700. LME data show one long position, or bet on higher prices, exceeds 40 percent of tin contracts to expire in September. There are eight short positions, or bets the price will fall, for the same month, according to the LME. Nickel rose 1.4 percent to $16,630 a ton; lead gained 1.2 percent to $1,765 a ton; zinc rose 0.1 percent to $1,700 a ton.