By Glenys Sim Dec. 23 (Bloomberg) -- Copper rebounded in Asia as investors in China stepped up arbitrage trading to take advantage of the price gap between London and Shanghai. The metal has fallen 0.2 percent on the London Metal Exchange this month, while Shanghai prices have climbed 1.5 percent, as the dollar’s strength damped demand for commodities priced in the U.S. currency. Arbitrage traders profit from disparities in prices of equivalent securities or commodities that are traded on more than one market. “The arbitrage window has opened up and Chinese traders view dips in the London price as good buying opportunities,” Li Rong, chief analyst at Great Wall Futures Co., said in Shanghai. Copper for delivery in three months on the London Metal Exchange gained as much as 0.7 percent to $6,927 a metric ton and traded at $6,920 at 9:52 a.m. in Singapore. The contract dropped 0.8 percent yesterday. March-delivery copper on the Comex division of the New York Mercantile Exchange added 0.2 percent to $3.1450 a pound, while March-delivery copper on the Shanghai Futures Exchange gained 0.6 percent to 55,670 yuan ($8,153) a ton. “This kind of buying activity may continue as London prices stay muted because of the dollar’s strength and rising inventories,” said Li. The dollar dropped for the first time in seven days against a basket of currencies of six major trading partners, including the euro and yen. It has gained 4.4 percent this month. Rising Inventories Inventories monitored by the London Metal Exchange gained for a 36th consecutive day to an eight-month high of 480,900 tons, while stockpiles in Shanghai expanded by the most in two months last week to 104,377 tons. Still, prices are supported by the potential for supply disruptions in Chile after workers at Codelco’s Norte division called for a strike after being presented the latest wage offer. Codelco is the world’s largest copper producer and Norte is its biggest unit. Among other LME-traded metals, aluminum was little changed at $2,240 a ton, zinc gained 0.5 percent to $2,445 a ton and nickel added 0.3 percent to $17,800 a ton. Lead climbed 0.4 percent to $2,320 a ton and tin hadn’t traded by 10:06 a.m. in Singapore. To contact the reporter for this story: Glenys Sim in Singapore at gsim4@bloomberg.net

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