By Bloomberg News March 8 (Bloomberg) -- Copper climbed for a second day as the weaker dollar and signs of improvement in the U.S. economy increased investor demand for commodities. Copper for three-month delivery on the London Metal Exchange gained as much as 1.1 percent to $7,628 a metric ton and traded at $7,599 a ton at 4:26 p.m. in Singapore. The June-delivery contract on the Shanghai Futures Exchange increased as much as 1.5 percent to 60,780 yuan ($8,904) a ton and closed at 60,690 yuan. The dollar fell for a second day against six major currencies after lower-than-forecast job losses in the U.S. and a pledge from French President Nicolas Sarkozy that Europe will help Greece against any speculative “attack” against its bonds. China, the biggest copper user, will maintain a moderately loose monetary policy stance, Premier Wen Jiabao said March 5. “The dollar is the key if copper is to make any breakthrough,” Li Qiang, an analyst at Xinhu Futures Co., said from Shanghai today. “Improvement in Greece may drive down the currency, which in turn boosts metal prices. So far we haven’t seen any news from Beijing that’s particularly relevant to metal markets, except that an interest rate hike probably isn’t imminent,” he said. China’s economy expanded 10.7 percent in the fourth quarter. Wen pledged to crack down on property speculation and maintain a “basically stable” yuan to keep the economy balanced. He was speaking at the National People’s Congress in Beijing last week. China’s central bank may end a 20-month peg to the dollar as early as the second quarter, allowing a 2 percent one-step gain, and then letting the currency strengthen another 1 percent to 2 percent in 12 months, New York University Professor Nouriel Roubini said in a March 4 interview. Slowing Growth “Theoretically, a stronger yuan would boost import of commodities by reducing costs and would at the same time curb exports,” Xinhu’s Li said. Golden Dragon Precise Copper Tube Group Inc., the world’s largest producer of copper tubing, said domestic demand growth will slow from last year. “China’s policies, including monetary tightening, will not support a significant increase of copper prices,” Golden Dragon Chairman Li Changjie said. “Still, prices won’t drop by a big margin either,” he said while attending the Congress today. He expected prices to fluctuate around 60,000 yuan this year. “In the near term, we’ll need to watch if Shanghai copper can break the 60,000-yuan level” where sell orders cluster, to gauge future sentiment, Wu Xiaoqi, an analyst at Minmetals Star Futures Co. said from Beijing today. Shanghai is tracking gains in London, he said. Aluminum in London climbed 0.8 percent to $2,247.50 a ton, zinc gained 1.5 percent to $2,385 a ton, lead increased 1.8 percent to $2,270, nickel added 1.1 percent to $22,630 and tin gained 0.6 percent at $17,500. --Li Xiaowei. With reporting by Xiao Yu in Beijing. Editors: Matthew Oakley, Jake Lloyd-Smith. To contact the Bloomberg News staff on this story: Li Xiaowei in Shanghai at Xli12@bloomberg.net

Source