By Agnieszka Troszkiewicz
Copper rose to a three-month high in New York before figures that may show builders in the U.S. broke ground on more houses, signaling stronger demand for the metal.
Construction began on 575,000 houses at an annual rate, up 2.7 percent from May, according to the median projection of economists surveyed by Bloomberg News. Copper, used in pipes, wiring and roofing, has gained this month even as concern about Europe’s debt crisis and talks to raise the U.S. borrowing limit spurred some investors to shun risk.
“U.S. housing-starts and building-permits data will be released today, which are important for base-metals prices,”Edelweiss Comtrade Ltd. said in a report.
Copper for September delivery advanced 5.15 cents, or 1.2 percent, to $4.4545 a pound by 7:44 a.m. on the Comex in New York. Prices reached $4.4735, the highest level since April 12. Copper for three-month delivery climbed 0.9 percent to $9,786 a metric ton on the London Metal Exchange.
European leaders will meet this week for the second time in a month as they strive to agree on funding a second Greek bailout and buttressing their efforts to stem rising bond yields in the region. In the U.S., President Barack Obama is urging lawmakers to agree to a deficit-cutting deal as the Aug. 2 deadline for raising the debt ceiling approaches.
“The overwhelming worry at the moment is on the macro side, particularly the sovereign-debt risks,” said Duncan Hobbs, an analyst at Macquarie Group Ltd. in London. With those concerns persisting, “it’s difficult to see a really strong rally breaking out.”
Still, Comex copper has climbed 4 percent in July as the Standard & Poor’s 500 Index of equities slid 1.2 percent. Concern that supply may run short of demand bolstered prices as Rio Tinto Group said last week its second-quarter production of mined copper slid 24 percent. Larger rival BHP Billiton Ltd. is due to release quarterly figures tomorrow.
China, the world’s biggest copper consumer, will have to import more of the metal in the second half than in the first six months, which will help drive prices to new highs in the fourth quarter, said Ren Gang, head of Maike Futures Co.’s research department.
“Physical market conditions are generally improving” in China, Macquarie’s Hobbs said. “Investors outside of China looking at base-metals markets see compelling fundamental stories in a number of markets.”
Zinc for three-month delivery on the LME rose 1.7 percent to $2,472 a ton after reaching $2,482, the highest level since April 13. Orders to withdraw the metal from New Orleans warehouses climbed 1,100 tons to 48,900 tons after surging more than sixfold yesterday.
Aluminium, lead, nickel and tin advanced in London.