Copper Rises From 12-Week Low as Europe Agrees on Loan Fund

May 10 (Bloomberg) -- Copper rose from the lowest level in 12 weeks on speculation an emergency loan fund will keep Europe’s credit crisis from spreading, bolstering the global economic recovery.

Three-month delivery copper on the London Metal Exchange climbed as much as 1.9 percent to $7,079 a metric ton and traded at $7,060 at 12:18 p.m. in Shanghai. The metal fell to $6,945 a ton May 7, the lowest close since Feb. 15. Aluminum, lead, nickel and zinc also gained.

European leaders agreed on a loan package worth 500 billion euros ($643 billion) to prevent Greece’s fiscal woes from triggering a broader sovereign-debt crisis. U.S. stock futures gained, the euro climbed and the dollar fell.

The “metals market remains very sensitive to development in the euro regions,” Zeng Chao, an analyst at Everbright Futures Co., said from Shanghai. “Declines might be seen as overdone today or might be extended on another day.”

The Reuters/Jefferies CRB Index of 19 raw materials fell 5.9 percent last week, the biggest weekly slide since Dec. 5, 2008, as the dollar rose on European debt concerns. The Dollar Index fell as much as 1.2 percent to 83.44 today against six major counterparts, the biggest slide in almost a month.

China, the world’s biggest metals user, will report its trade balance today, and industrial production and other economic data tomorrow.

“We expect China’s copper shipments in April to show noticeable decline from a month earlier,” Zeng said. “That may damp prices in London but not in Shanghai.”

Copper for August delivery in Shanghai jumped as much as 3 percent to 56,200 yuan ($8,233) a ton before trading at 55,990 yuan a ton at midday. Shanghai aluminum added 0.8 percent to 15,765 yuan a ton and zinc increased 0.6 percent to 16,935 yuan a ton at the same time.

Aluminum in London climbed 2.8 percent to $2,130 a ton, zinc increased 2.1 percent to $2,135 a ton and lead added 1 percent to $2,070 a ton. Nickel jumped 3.3 percent to $23,300 a ton and tin gained 0.6 percent to $17,700 a ton.

--Li Xiaowei. Editor: Matthew Oakley.

(businessweek.com)