Copper Approaches Record as China Refrains From Increasing Interest Rates

Bloomberg----Copper climbed to within 1 percent of an all-time high after China refrained from raising borrowing costs even as inflation surged, and increased imports by the world’s largest consumer boosted the outlook for demand.

Three-month copper on the London Metal Exchange rose as much as 1.1 percent to $9,087 a metric ton, and traded at $9,079.50 a ton at 10:13 a.m. in Singapore. The contract peaked at $9,091 a ton on Dec. 9.

The People’s Bank of China, which on Dec. 10 raised reserve-requirement ratios for banks by half a percentage point, didn’t increase interest rates at the weekend even as consumer prices jumped 5.1 percent in November. That’s the fastest pace in more than two years and beats the nation’s 3 percent full- year target.

An interest rate increase is “the biggest risk to copper’s rally and the longer it takes for that to happen, investors’ confidence to push for higher prices will continue to build,” Yang Zhenqiang, an analyst at First Futures Brokerage Co.

The metal for March delivery on the Shanghai Futures Exchange gained as much as 1.4 percent to 68,730 yuan （$10,321） a ton, the highest price since Nov. 12. Futures on the Comex in New York climbed as much as 1 percent to $4.1515 pound.

UBS AG was among firms predicting a rate increase in China at the weekend as the statistics bureau brought forward the release of the inflation data to Dec. 11, and after the Communist Party’s Politburo said the nation would shift to a tighter, “prudent” monetary policy next year.

Imports of copper and products by China rose 29 percent last month to 351,597 tons compared with October, the General Administration of Customs said on Dec. 10. Shipments were 21 percent higher than a year earlier, according to Bloomberg data. Imports in the first 11 months of this year gained 0.7 percent to 3.95 million tons.

Aluminum in London advanced 1.2 percent to $2,335 a ton, zinc climbed 2.2 percent to $2,323 a ton and lead rose 1.3 percent to $2,421 a ton. Nickel gained 0.5 percent to $24,100 a ton, while tin hadn’t traded.