By Anna Stablum March 3 (Bloomberg) -- Copper rose in New York and London as a weaker dollar boosted the appeal of metals as an alternative investment and bookings increased to remove metal from warehouses. The U.S. Dollar Index, a gauge against six counterparts, fell for a second day, making dollar-priced commodities cheaper for those holding other currencies. Bookings to deliver metal from warehouses monitored by the London Metal Exchange, or canceled warrants, jumped 21 percent and have more than doubled in a week. “Dollar weakness is supporting the price, and we are seeing the fundamental picture improving, with cancellation of stocks supporting that argument,” said Alex Heath, head of industrial-metals trading at RBC Capital Markets in London. Copper for May delivery climbed 2.1 cents, or 0.6 percent, to $3.4325 a pound at 8:38 a.m. on the New York Mercantile Exchange’s Comex unit. Copper for three-month delivery rose 0.9 percent to $7,560 a metric ton on the LME. All of the six main metals traded on the LME advanced. Comex copper has gained 4.5 percent this week after an earthquake struck Chile, the world’s biggest producer, on Feb. 27, sparking concern that output might be disrupted. Most mines in the nation are running normally, the National Mining Society said yesterday. Santiago-based industry leader Codelco said it returned to full output after power was restored. Production Goals Chilean companies should be able to make up for lost production and won’t miss output targets this year, said Ramon Jara, the society’s vice president. Chile produced 5.4 million tons of copper in 2009. Global supply is estimated to reach 18.5 million tons this year, according to Barclays Capital. Copper stockpiles tracked by the LME fell 0.3 percent to 550,575 tons. Reduced inventories and stronger bookings signaled improved demand and supported prices, RBC’s Heath said. “People are looking at the first signs of an economic recovery,” he said. Nickel, Zinc Nickel for three-month delivery on the LME gained 2.3 percent to $22,750 a ton after rising as high as $22,868, the highest price since June 19. Production may fall behind demand this year for the first time in four years on increased usage by the stainless steel industry, the biggest user of the metal, according to London-based research group CRU. The nickel deficit may be 20,000 metric tons this year after a surplus of 45,000 tons last year, Maartje Collignon, a CRU analyst, said yesterday. Prices have climbed 20 percent this year, the most among the six main metals traded on the LME, as stainless-steel makers including Madrid-based Acerinox SA reported increased orders and production. Zinc rose 2.2 percent to $2,305 a ton. Global production will outpace use by almost 1 million tons this year as demand in China grows at a “modest rate,” metals researcher Brook Hunt said. Worldwide consumption will rise 6 percent this year after a “big drop” of 9 percent in 2009, analyst Christopher Parker said in an interview yesterday. The industry had a 1 million-ton surplus last year, he said. Aluminum advanced 0.2 percent to $2,173 a ton, lead gained 2.3 percent to $2,248 a ton and tin rose 1.5 percent to $17,350 a ton. --With assistance from Heather Walsh in Bogota, Millie Munshi in New York and Bob Willis in Washington. Editors: Dan Weeks, Stuart Wallace. To contact the reporter on the story: Anna Stablum in London at astablum@bloomberg.net. To contact the editor responsible for this story: Stuart Wallace at swallace6@bloomberg.net. Related Articles

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