Copper may rise in London, reducing this week’s drop, after German business confidence unexpectedly climbed to a record and inventories of metal in Shanghai shrank. The Munich-based Ifo institute’s business climate index gained to 110.3 from 109.8 in December. Economists predicted the gauge would hold steady, according to the median of 41 forecasts in a Bloomberg News survey. Copper stockpiles monitored by the Shanghai Futures Exchange fell for the first time in four weeks, according to figures released today. “A strong Ifo suggests a strong global economy,” said Jesper Dannesboe, a strategist at Societe Generale SA in London. “Historically there has been a close relationship between the leading Ifo survey and base metals.” Copper for delivery in three months climbed $25, or 0.3 percent, to $9,380 a metric ton at 10:13 a.m. on the London Metal Exchange. The contract is down 2.8 percent for the week after falling 2.3 percent yesterday, the most since November. Copper for delivery in March slipped 0.1 percent to $4.2695 a pound on the Comex in New York. “Yesterday was a bit overdone, though the likelihood of profit-taking was always high after the run that had occurred,” said David Thurtell, an analyst at Citigroup Inc. in London. “The outlook is still very strong. All the forward indicators point to ongoing strong growth in China.” Stockpiles Contract Copper inventories in Shanghai declined 2,283 tons to 130,364 tons, based on a survey of eight warehouses, the exchange said on its website. Stockpiles reached a seven-month high last week, according to Bloomberg data. China’s imports of refined copper in 2010 fell 8.4 percent to 2.92 million tons, the customs agency said today. China imported 228,609 tons of refined copper in December, down from 232,298 tons in November. Orders to draw copper from LME stocks, or canceled warrants, rose 3.4 percent to 31,975 tons, daily exchange figures showed. LME copper stockpiles rose 0.2 percent to 381,300 tons. Lead for three-month delivery on the LME gained 0.4 percent to $2,447 a ton. LME inventories were little changed at 264,175 tons today after climbing 25 percent in four days to the highest level since 1995. The fee to borrow lead for next-day delivery, the so-called tom-next spread, was last at a premium of $10, the highest level since November 2008. It closed yesterday at $2. A higher fee usually signals tighter supply. Tin rose 0.8 percent to $27,195 a ton and aluminum gained 0.1 percent to $2,409.50 a ton. Nickel climbed 0.3 percent to $25,860 a ton and zinc added 0.8 percent to $2,348 a ton. To contact the reporter on this story: Maria Kolesnikova in Moscow at mkolesnikova@bloomberg.net To contact the editor responsible for this story: Claudia Carpenter at ccarpenter@bloomberg.net.

Source