By Chanyaporn Chanjaroen Feb. 2 (Bloomberg) -- Copper rose for a second day in London on speculation that a weaker dollar will spur demand for metals as an alternative investment. The U.S. Dollar Index, a six-currency gauge of the strength of the greenback, retreated for a second day, falling as much as 0.2 percent. A weaker dollar makes commodities priced in the currency cheaper in terms of other monies. Copper dropped 8.5 percent in January in London, the most in 13 months, as the dollar index added 2.1 percent, its second climb in a row. “It’s all about the dollar now,” said Andrey Kryuchenkov, an analyst at VTB Capital in London. Copper for three-month delivery gained $76, or 1.1 percent, to $6,866 a metric ton at 10:31 a.m. on the London Metal Exchange, reducing this year’s loss to 6.9 percent. Copper for March delivery added 1.1 percent to $3.116 a pound on the New York Mercantile Exchange’s Comex unit. All of the six main metals traded on the LME advanced, led by tin. Copper producer Kazakhmys Plc and other mining companies posted six of the 10 biggest gains in the U.K. benchmark FTSE 100 Index of shares. Chinese purchases of LME-traded copper spurred by the price differential with the Shanghai market have come to a halt as the Asian nation prepares for this month’s weeklong Lunar New Year celebration, Leon Westgate, an analyst at Standard Bank Plc in London, wrote in a report yesterday. The annual holiday starts Feb. 14. Chinese Demand “There may be a bit of further weakness to come” for now, Westgate said, while maintaining his positive outlook on copper prices for this year and next. Record imports of copper into China in 2009’s first half helped prices to double for the year. The nation spent a record $32 billion on resource acquisitions last year. Chinese companies will seek out more iron ore, coal, oil, copper and gold assets, said Jing Ulrich, chairwoman of China equities and commodities at JPMorgan Chase & Co. in Hong Kong. LME-monitored copper stockpiles dropped 0.4 percent to 541,150 tons. Combined with those tracked by Comex and the Shanghai Futures Exchange, they totaled 736,363 tons, close to a six-year high. Aluminum for three-month delivery advanced 0.6 percent to $2,097 a ton on the LME and nickel gained 1 percent to $18,180 a ton. Lead rose 1.5 percent to $2,075 a ton, zinc added 0.6 percent to $2,158 a ton and tin increased 2 percent to $16,475 a ton. To contact the reporter on this story: Chanyaporn Chanjaroen in London at cchanjaroen@bloomberg.net.

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