Copper rebounded from its biggest decline in two weeks on renewed speculation that a global deficit will erode stockpiles and support prices that reached an all-time high earlier this week. Three-month copper on the London Metal Exchange rose as much as 0.7 percent to $9,995 a metric ton and was at $9,974 at 2:21 p.m. in Singapore. It fell 1.3 percent yesterday, the most since Jan. 25, after the People’s Bank of China raised borrowing costs before a report next week that may show inflation accelerated. The price peaked at $10,160 a ton on Feb. 7. “We consider any pullbacks as temporary as Chinese consumption growth is set to remain robust while supply fails to keep up,” Credit Suisse Group AG analysts Stefan Graber and Jun Hao Tan wrote in a note today. The International Copper Study Group is predicting a 435,000-ton deficit this year. May-delivery metal on the Shanghai Futures Exchange gained as much as 0.5 percent to 75,940 yuan ($11,531) a ton, before trading at 75,800 yuan a ton. Futures in New York climbed for the first day in four, by as much as 0.8 percent, to $4.5585 a pound and last traded at $4.55 a pound. “China can hike interest rates as many times as it likes and it won’t have much impact if the U.S. continues to maintain a loose monetary policy,” Ju Guoxian, an analyst at First Capital Futures Co., said from Shenzhen. “We’ll still get growth, albeit lower than some might hope for, and that’s going to keep the copper balance negative.” Stimulus Program Federal Reserve Chairman Ben S. Bernanke said yesterday that U.S. unemployment rate is likely to remain high “for some time” and the extent to which the recovery is established and inflation is pointing higher or lower will help determine whether the Fed expands or pulls back on its stimulus program. On Nov. 3, the central bank announced that it would embark on a second round of asset purchases to help boost the recovery. The program, slated to last through June, follows $1.7 trillion of purchases of mortgage and government debt through last March. Aluminum in London shed 0.2 percent to $2,540 a ton, lead lost 0.9 percent to $2,497.50 a ton and tin fell 0.2 percent to $31,200 a ton. Zinc and nickel were little changed at $2,455 a ton and $28,340 a ton respectively. The dollar climbed for the first time in four days against a six-currency basket including the euro and yen, “weighing on other metals that don’t have the same kind of bullish fundamentals that copper does,” said Ju. 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

Source