By Anna Stablum Oct. 23 (Bloomberg) -- Copper rose in London, heading for its biggest weekly gain since August as the dollar fell for a third week, spurring demand for commodities as an alternative investment. The Dollar Index, a six-currency measure of the greenback’s value, has lost 0.5 percent this week and slid on Oct. 21 to the lowest since August of last year. Declines by the currency make dollar-priced metals cheaper for holder of other monies. Copper also has gained on supply concern stemming from South American strikes and reduced output at a BHP Billiton Ltd. mine. “Copper is benefiting from a number of factors,” David Thurtell, an analyst at Citigroup Inc. in London, said by phone. “Chief among these are the weaker dollar, strong demand from China and, more recently, concerns over short-term supply due to copper mine strikes in Chile and the BHP Olympic Dam problems.” Copper for three-month delivery added $79.75, or 1.2 percent, to $6,669.75 a ton on the London Metal Exchange at 10:17 a.m. local time. The contract is on course for a 7.1 percent weekly advance, the biggest since the week ended Aug. 7. It rose as high as $6,679.75, the highest intraday price since Sept. 29, 2008. December-delivery copper climbed 1.4 percent to $3.0395 a pound on the New York Mercantile Exchange’s Comex unit. Higher Forecast Copper will average $6,570 a ton this quarter, above its previous estimate of $5,500, Standard Chartered Plc said in a report. “The main reason is that we expect the dollar to weaken further as we head into the year-end, and the global supply of liquidity is likely to remain ample,” London-based analyst Dan Smith wrote in the report. Record first-half imports into China, the world’s biggest copper consumer, helped the metal’s price to more than double this year along with the weaker dollar. The country’s economy, the world’s third-largest, expanded 8.9 percent in the third quarter from a year earlier, data yesterday showed. “China is still on an impressive track of overshooting its official 8 percent growth target,” Andrey Kryuchenkov, an analyst at VTB Capital in London, said in a report today. “In the longer run, it is certainly positive for most metals and signals that serious restocking from China could be around the corner.” Strike Continues A strike at BHP’s Spence copper mine in Chile entered its 11th day today. Talks yesterday between the world’s largest mining company and miners failed to result in an agreement, and negotiations will continue today, according to union leader Andres Ramirez. The mine accounts for 1 percent of global copper production, according to Macquarie Bank Ltd. Full production at its Olympic Dam mine in Australia will only resume by the end of March after repairs to a damaged shaft, BHP said on Oct. 21. Until then, ore hoisting will be at about 25 percent of capacity, the company said. In Asia, an improvement in demand from last year may lift annual copper cathode fees for 2010 by as much as 23 percent, Pan Pacific Copper Co. said. The premium charged by producers probably will rise by $10 to $15 a ton, company executive Yoshihiro Nishiyama said yesterday. The benchmark copper premium imposed by Chile’s Codelco, the world’s largest copper producer, was $65 a ton this year for Japanese customers, $64 in South Korea and $72 to $75 for China. Zinc Gains Inventories of copper in LME-monitored warehouses climbed 0.8 percent to 367,075 tons, according to daily exchange figures. In Shanghai, stockpiles fell 4.2 percent to 95,976 tons, the Shanghai Futures Exchange said. Among other LME metals for three-month delivery, zinc rose 1 percent to $2,273 a ton after climbing as high as $2,288, the highest since May 20 last year. Workers also are on strike in Peru, the second-largest producer of the metal used mostly to rust-proof steel. Aluminum rose 1.1 percent to $1,987 a ton after advancing as high as $2,000, the highest intraday price since Aug. 19. Demand for the lightweight metal from China, the world’s biggest consumer, is up 2.5 percent from a year ago so far in 2009, according to Jorge Vazquez, an analyst at Laredo, Texas-based researcher Harbor Intelligence. Improved demand will push prices above $2,100 a ton and as high as $2,400 by year end, Vazquez said yesterday by e-mail. China represented 41 percent of global aluminum demand in September, he said. Tin gained 1 percent to $15,150 a ton after reaching $15,600, the highest intraday price since June 12. Lead advanced 1.1 percent to $2,432 a ton, and nickel rose 1.3 percent to $19,400 a ton.

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