By Anna Stablum Nov. 13 (Bloomberg) -- Copper headed for a second weekly gain in New York and London as the dollar slid, fueling demand for commodities as an alternative investment. The Dollar Index, a six-currency gauge of the greenback’s performance, dropped as much as 0.4 percent, closing in on a second weekly retreat. That made dollar-priced metals cheaper for holders of other monies. Prices also gained as figures showed that the euro-area economy emerged from its worst recession since World War II in the third quarter. “We are expecting a weaker dollar short-term,” Mark Heyhoe, a Hanson Westhouse Ltd. analyst in London, said by phone. Copper “will continue at these levels” and “could even go a bit higher before the new year,” he said. March-delivery copper gained as much as 2.7 cents, or 0.9 percent, to $3 a pound on the New York Mercantile Exchange’s Comex division. The contract was at $2.983 at 8:21 a.m. local time, up 0.2 percent for the week. Copper for three-month delivery added 0.3 percent to $6,520 a metric ton on the London Metal Exchange. The dollar index has dropped 7.2 percent this year, helping copper to double, along with record first-half imports into China and expectations of an economic revival. Inbound shipments into China will fall by more than half in 2010 as stockpiles curb demand, Beijing Antaike Information Development Co. said. The country will import a net 1.43 million tons of refined copper next year, down 52 percent from an estimated 2.99 million tons this year, Jiang Guofeng, an analyst at Antaike, said at a conference today. Unreported Stockpiles “Not all of the metal China has imported during the past few months was consumed,” Michael Widmer, an analyst at Bank of America Securities-Merrill Lynch, wrote in a report today. Local reported and unreported copper inventories have risen by 700,000 tons this year, according to the analyst. “The country’s metal imports may not be as strong in 2010 as they were through most of this year,” he said. Still, metals demand is likely to benefit from fiscal and monetary stimulus packages in developed nations, Widmer predicted. Copper supply will outpace demand by 394,000 tons this year before the surplus shrinks to 172,000 tons next year, he said. Copper for immediate delivery will average $4,730 a ton in 2009 and rise to $7,125 next year, according to Widmer. Gross domestic product in the economy of the 16 nations using the euro rose 0.4 percent from the second quarter, when it fell 0.2 percent, the European Union’s statistics office in Luxembourg said today. Economists forecast the economy to grow 0.5 percent, according to the median of 34 estimates in a Bloomberg survey. Inventories Swell Copper inventories monitored by the LME rose 4.7 percent this week, the 18th advance in a row, to 403,625 tons, the highest level since April 30. Among other LME metals for three-month delivery, nickel rose 0.2 percent to $16,220 a ton. The metal, mostly used in stainless steel, is down 6.6 percent this week, the most since the week ended Sept. 4. Prices may drop to $15,000 by the end of the year, Maartje Collignon, an analyst at research group CRU in London, said by phone yesterday. “The price reflects the reappearance of demand weakness in the market, both in the western world and in Asia,” she said. LME-monitored stockpiles rose for an eight day to 131,748 tons, the highest since 1995. The metal is the worst LME performer over the past month, down 10 percent. Aluminum fell 0.7 percent to $1,935 a ton, while zinc gained 0.9 percent to $2,169.25 a ton. Lead was little changed at $2,261 a ton, and tin increased 0.3 percent to $14,750 a ton. To contact the reporter on this story: Anna Stablum in London at astablum@bloomberg.net

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