Copper Gains to Record on Lower-Than-Expected China Inflation

Copper in London climbed to a record as a lower-than-expected inflation rate in China, the largest consumer, eased concern the government would continue policy tightening that could curb demand for metals. Aluminum gained.

The metal for three-month delivery rose as much as 0.3 percent to $10,190 a metric ton on the London Metal Exchange, and traded at $10,150 at 12:09 p.m. Shanghai time. Copper for May delivery in Shanghai climbed 0.6 percent to 76,760 yuan （$11,644） a ton by the 11:30 a.m. local time break.

China’s consumer prices rose 4.9 percent in January from a year earlier, the National Bureau of Statistics said on its website today. That compared with a 4.6 percent gain in December and the median estimate of 5.4 percent in a Bloomberg News survey of 27 economists.

“The CPI is positive for the market,” Xu Liping, an analyst at HNA Topwin Futures Co. said by phone from Shanghai. “The market was concerned that a very high inflation rate could trigger more tightening policies, but it turned out to be lower than many people guessed.”

The statistics bureau reduced the weighting of food in the index starting from January 2011 amid a drought in the north of the country. Food previously accounted for a third of the basket of goods that make up the index and was the main driver of inflation last year. China raised borrowing costs and savings rates on Feb. 8 for the third time since mid-October.

Copper Imports

Inbound shipments of copper and its products gained 5.7 percent from a month earlier to 364,240 tons in January, according to a statement on the customs department yesterday. China’s scrap imports fell 16 percent to 360,000 tons last month.

“The copper imports data yesterday was neutral,” Xu said. “While the arrivals of unwrought copper and copper products increased, scrap fell, so in terms of copper content it didn’t vary greatly from a month ago.”

Aluminum in London gained 0.5 percent to $2,525.50 a ton, zinc declined 0.2 percent to $2,515 a ton, and lead was unchanged at $2,640 a ton. Nickel lost 0.2 percent to $28,850 a ton, and tin fell 0.5 percent to $32,300 a ton. （Source from：Bloomberg）