By Glenys Sim Jan. 14 (Bloomberg) -- Copper gained for a second day in Asia on optimism demand will grow even as China moved to curb record lending which helped prices more than double last year. Aluminum also advanced. Copper for immediate delivery in Changjiang, Shanghai’s biggest cash market, traded above 60,000 yuan ($8,788) a metric ton every day in the past week, levels not seen since September 2008, when Lehman Brothers Holdings Inc.’s bankruptcy filing dragged the global economy down. Futures in Shanghai rose for the first time in three days. “Demand is quite robust at the moment as it usually tends to be before the Lunar New Year,” said Shenzhen Rongtuo Trading Co. analyst Cheng Xiongfei today. “Although the market is still in contango, spot prices and premiums have been improving.” Copper for delivery in three months on the London Metal Exchange advanced as much as 0.7 percent to $7,540 a ton, and traded at $7,507 at 11:30 a.m. in Singapore. The lunar vacation will start on Feb. 14 and last a week. The contract fell as much as 2.1 percent yesterday after China’s central bank raised the amount of deposits that banks must hold in reserve, a measure viewed by analysts as potentially foreshadowing an interest-rate increase. March-delivery copper on the Comex division of the New York Mercantile Exchange rose as much as 1 percent to $3.4345 a pound. The April-delivery contract on the Shanghai Futures Exchange added as much as 2.5 percent to 61,240 yuan, and stood at 60,790 yuan at the midday break. Import Premium Commodity markets often trade in contango, with later dated contracts priced higher than near-month deliveries to reflect holding costs and a premium for supply certainty. That front- month discount can narrow or widen depending on near-term supplies. Inventories in Shanghai expanded more than sixfold last year as imports swelled to a record. Premiums paid by Chinese importers, typically a good indicator of demand, rose to around $80 to $110 a ton over the London Metal Exchange cash price last week, up from $60 to $70 last month, according to traders and analysts. Still, that is down from last year’s peak of $280 in April. Cochilco, Chile’s state copper statistics agency, forecasts prices may average $3.10 a pound ($6,836 a ton) in 2010, an increase from a previous estimate of $2.70 a pound, as a fall in mine supplies outweighs a slowdown in demand. Chile is the world’s largest copper producer. Global demand may fall by 0.6 percent to 17.8 million tons in 2010, while global production will fall by 104,000 tons, said Cochilco’s research director Ana Isabel Zuniga. Aluminum Gains Three-month aluminum on the LME rose as much as 1.3 percent to $2,324 a ton, extending yesterday’s 0.6 percent gain. Canceled warrants, bookings to remove stockpiles from warehouses monitored by the exchange, climbed to the highest in more than two years on Jan. 11 when expressed as a percentage of total inventories. LME stockpiles now total 4.6 million tons. “There is improved demand, so some of the metal will go to satisfy the growth,” Marco Georgiou, head of primary aluminum and products at CRU, said yesterday. “Some will also go to non- exchange warehouses, where it is cheaper to store.” Among other LME-traded metals, zinc gained 0.2 percent to $2,495 a ton, and lead was unchanged at $2,480 a ton. Nickel fell 0.6 percent to $18,200 a ton, and tin dropped 1.4 percent to $17,750 a ton by 11:33 a.m. in Singapore.

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