By Glenys Sim Jan. 19 (Bloomberg) -- Copper advanced for a second day to a one-week high as the dollar’s drop boosted the purchase of raw materials as alternative investments. Aluminum and zinc gained. The metal used in construction and automobiles also climbed as London Metal Exchange prices continued to trade at less than those in Shanghai, encouraging imports into China, the world’s largest metals user. The dollar dropped for the seventh time in eight days against a six-currency basket today. “We’re seeing steady demand in China, which is expected to continue in these few weeks leading to Chinese New Year,” Southwest Futures Co. analyst Jia Zheng said from Shanghai. “It is profitable to import the metal for sale in the domestic market.” The Lunar New Year holiday, which precedes the peak- demand season, starts on Feb. 14 and lasts a week. Copper for delivery in three months on the London Metal Exchange added as much as 1.1 percent to $7,585 a metric ton, the highest level since Jan. 12, and traded at $7,558.75 at 1:01 p.m. in Singapore. March-delivery copper on the Comex division of the New York Mercantile Exchange rose as much as 2.5 percent to $3.45 a pound. The May-delivery contract on the Shanghai Futures Exchange advanced for a second day, by as much as 1.3 percent to 61,760 yuan ($9,045) a ton, before trading at 61,380 yuan by the midday break. Copper futures in China are trading at a premium to their London Metal Exchange counterpart after advancing 11 percent in the past month, compared with a 9.3 percent gain in London. China Premium Prices in Shanghai yesterday were more than 500 yuan ($73) a ton higher than in London, after accounting for China’s 17 percent value-added tax, according to data compiled by Bloomberg. The dollar traded near a four-week low against the yen before reports this week that may show U.S. building permits rose at a slower pace and manufacturing in the Philadelphia region fell, prompting speculation the Federal Reserve will keep interest rates near zero to sustain economic growth. Among other LME metals, aluminum rose 0.5 percent to $2,318.75 a ton, zinc gained 0.8 percent to $2,503 a ton, and lead climbed 0.5 percent to $2,477.25 a ton. Nickel added 0.2 percent to $18,926 a ton, while tin was little changed at $17,950 a ton. To contact the reporter for this story: Glenys Sim in Singapore at gsim4@bloomberg.net

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