Copper gained the most in more than two weeks

Copper in New York gained the most in more than two weeks on speculation that global economic growth will increase demand for the metal used in homes, cars and appliances.

China's economy in the second quarter expanded at the fastest pace in 12 years, the statistics bureau said in Beijing today. Federal Reserve Chairman Ben S. Bernanke said yesterday U.S. growth will pick up ``a bit'' next year. The price of copper has gained more than fourfold in the past four years as worldwide demand outpaced production.

A strong global economy ``is going to be a big driver for copper prices,'' said Patrick Chidley, an analyst at Barnard Jacobs Mellet LLC in Stamford, Connecticut. ``Demand seems to be running ahead.''

Copper futures for September delivery gained 7.4 cents, or 2.1 percent, to $3.637 a pound at 11:45 a.m. on the Comex division of the New York Mercantile Exchange. A close at that price would mark the biggest percentage gain since July 2. Before today, the metal climbed 4.2 percent in the past month.

China's gross domestic product expanded 11.9 percent in the second quarter from a year earlier, triggered by spending on factories and real estate. Growth in China has helped spur a 27 percent rally in copper this year as imports of the metal surged to a record. China is the world's largest user of the metal, followed by the U.S.

Global refined-copper consumption outstripped production in the four months ended April by 265,000 metric tons, swelled by a deficit of 90,000 tons in the latest month, the International Copper Study Group said yesterday.

Driven by China

``The deficit was driven by high Chinese demand,'' Michael Widmer, head of metals research at Calyon in London, said in a report today. Chinese consumption is ``set to remain well- supported,'' he said.

Labor unrest in Chile, the world's largest source of the metal, also underpinned the copper price, Chidley said.

Chile's state-owned Codelco was forced to reduce production at El Salvador, its smallest mine, for a fourth day because of protests, a labor leader said. The mine is in the northern part of the country.

Striking contract workers, who walked off the job on June 25 demanding higher pay, have also cut production at the Andina and El Teniente mines, the company said yesterday. Codelco is the biggest copper producer.

``The strike activity in Chile has been going on for some time now, and that could lead to lower production levels for the year,'' Chidley of Barnard Jacobs Mellet said.

On the London Metal Exchange, copper for delivery in three months gained $145, or 1.9 percent, to $7,970 a metric ton. The metal rose to a record $8,800 in May 2006 as labor disputes and mine accidents cut supplies.

A futures contract is an obligation to buy or sell a commodity at a fixed price for delivery by a specific date.

source:bloomberg.com