Updated: New York, Sep 11 20:32London, Sep 12 01:32Tokyo, Sep 12 09:32

Copper Climbs Most in Three Months After Chinese Imports Surge

By Millie Munshi

Sept. 11 (Bloomberg) -- Copper jumped 4 percent, the most in three months, as imports surged in China, the world's largest consumer of the metal.

Imports of copper and copper products gained 43 percent to 1.91 million metric tons in the eight months ended Aug. 31, the Beijing-based customs office said. The metal, used in pipes and wires, has gained 18 percent this year as global demand outpaced supplies.

``We have seen more Chinese activity in the market recently and more buying,'' said Warren Gelman, president of Kataman Metals in St. Louis. ``The question is whether we'll see this buying continue.''

Copper futures for December delivery gained 13.15 cents, or 4 percent, to $3.3875 a pound on the Comex division of the New York Mercantile Exchange. That marked the biggest percentage gain for a most-active contract since May 25.

Cable makers are the biggest users of the metal in China, which plans to spend more than 1 trillion yuan ($132 billion) to expand its electricity grid under a five-year plan ending in 2010.

``Chinese wire and cable manufacturers are running at full capacity,'' Scotia Capital analysts led by Na Liu said in a report yesterday. ``This is fundamentally supportive'' for the copper market, they said.

Chinese copper imports in August fell 7.2 percent to 191,876 tons from July. The drop was anticipated and less than some analysts had estimated, Gelman said.

`Stronger' September

``The decline was not as large as expected, given that August tends to be a very slow month,'' Edward Meir, an analyst at MF Global Ltd., said in a report today. ``The markets are looking for much stronger import numbers for September.''

Month-on-month imports of copper and copper products in China have been declining since March after a surge in first- quarter purchases sent domestic prices lower and made imports unprofitable.

The metal has gained fourfold in the past four years as demand soared in China, the world's fastest-growing major economy. Chinese copper consumption increased 37 percent in the five months ended May 31, the International Copper Study Group said on Aug. 23.

The price of the metal was underpinned by the prospect of a looming strike at Southern Copper Corp., traders said. The company, the world's fifth-largest producer of the metal, was scheduled to hold wage talks with workers in Peru this week in a bid to prevent a walkout, a union official said on Sept. 8.

On the London Metal Exchange, copper for delivery in three months gained $315, or 4.4 percent, to $7,475 a metric ton ($3.39 a pound). The percentage gain was the biggest in five months.

The metal rose to a record $8,800 a ton in May 2006.

To contact the reporter on the story: Millie Munshi in New York at mmunshi@bloomberg.net .

Last Updated: September 11, 2007 14:41 EDT