Copper rose to a record in London on concern governments may need to pump more money into economies to support a recovery, fueling inflation and eroding currency values. Copper for three-month delivery climbed as high as $8,988.25 a metric ton on the London Metal Exchange, surpassing the previous peak of $8,966 on Nov. 11. The contract was up $210.50, or 2.4 percent, at $8,980 at 10:09 a.m. local time, for a 22 percent gain this year. “Inflation is a big concern, and commodities are a good place to park your money if you’re looking for an alternative investment to currencies,” Ding Ke, a trader at Guohai Liangshi Futures Co., said from Zhejiang. “Copper has many things going for it, including expectations of a shortfall in supplies.” Copper for March delivery added 9.55 cents, or 2.4 percent, to $4.1035 a pound on the Comex in New York. Prices reached $4.11, the highest level since May 5, 2008, when they touched a record $4.2605. Copper stockpiles in LME warehouses have shrunk 30 percent this year, dropping to 351,375 tons, the lowest level since October 2009, exchange data show. Inventories monitored by the Shanghai Futures Exchange fell last week for a second week. Demand will outpace supply by 367,500 tons next year, enough for wires, pipes and appliances in about 1.8 million U.S. homes, according to the median forecast of 12 analysts surveyed by Bloomberg. Stockpiles may drop to an all-time low of less than one week’s usage, according to Michael Widmer, a London- based metals analyst at Bank of America Merrill Lynch. Fed Easing Copper gained on speculation the Federal Reserve may increase asset purchases, hurting the dollar and boosting demand for commodities as an alternative investment. Federal Reserve Chairman Ben S. Bernanke said the economy is barely expanding at a sustainable pace and the Fed may need more stimulus. The U.S. Dollar Index, a six-currency gauge of the greenback’s strength, dropped as much as 0.4 percent today, after increasing yesterday for the first time in four days. A weaker dollar makes metals priced in the currency cheaper in terms of other monies and spurs demand for commodities as an alternative investment. Demand for copper, used in everything from smart phones to brake pads, will increase 4.2 percent next year, compared with a 2.6 percent gain in production, Barclays Capital said in a report Nov. 11. Supplies fell 363,000 tons short of demand in the first eight months of this year, the International Copper Study Group said Nov. 23. Ore Grades Mining companies have failed to keep pace with demand because new reserves are harder to find and the quality of ore is declining, meaning less metal is extracted from each ton of earth. Average grades declined to about 1.1 percent this year from 1.6 percent in 1990, according to Guildford, England-based researcher Brook Hunt, a Wood Mackenzie company. The potential for exchange-traded products has helped the rally. ETF Securities Ltd., BlackRock Inc. and JPMorgan Chase & Co. have said they plan to start funds backed by the metal. One unidentified company held between 50 percent and 79 percent of LME copper stockpiles from Nov. 22 to Dec. 2, exchange data show. Buyers on Dec. 1 paid $74 a ton, the largest premium in two years, for immediate supply relative to the three-month contract. The gap was at $46 today. Aurubis AG, Europe’s largest smelter, is predicting higher demand next year. “We presently see a very positive order flow for next year,” Chief Executive Officer Bernd Drouven said last week. “Every copper price dip is recognized by customers as an opportunity for new orders.” Strike Ends Workers at Anglo American Plc and Xstrata Plc’s Collahuasi venture in Chile accepted a wage offer yesterday, ending a month-long strike at the world’s third-largest copper mine. The strike was the longest recorded dispute at a major copper mine in Chile, the world’s biggest producing nation. Tin for three-month delivery on the LME rose 2.8 percent to $26,200 a ton. Prices reached a record $27,500 on Nov. 9. The metal has jumped 55 percent this year, leading advances on the exchange, after production was disrupted in Indonesia and the Democratic Republic of Congo. Aluminum rose 1.5 percent to $2,340 a ton and nickel climbed 1.6 percent to $23,980 a ton. Lead gained 2.1 percent to $2,400 a ton and zinc added 3.5 percent to $2,297 a ton. To contact the reporter on this story: Glenys Sim in Singapore at gsim4@bloomberg.net To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net

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