China Central Bank: Copper Prices Rise as Falling Inventory and Reassure

Prices of commodity copper rose as falling inventories and reassuring comments from China's central bank on monetary policy boosted prices. Benchmark copper for three-month delivery on the London Metal Exchange was trading at $7,774 a tonne at 1310 GMT from $7,700 at the close on Thursday. The metal used in power and construction, earlier hit $7,810, its highest level since April 26. China is the world's top commodities of metals consumer and a major reason for copper's 140 percent gains last year.

China's central bank warned of mounting bad debt as the country's structural reforms accelerate, but reaffirmed its appropriately loose monetary policy stance and said it would deploy various fiscal and monetary tools to manage inflationary expectations. ''Pretty impressive rise,'' said David Wilson, director of metals research at Societe Generale. ''The fact that the Chinese central bank put out the announcement, is probably seized upon. ''It seems to have been taken as good news if there is not tightening up, there will still be some lending it's just a sentiment issue.''

India's central bank raised interest rates more than expected, extending its fight against inflation, raising speculation that China may have to do the same. Industrial metal prices firmed briefly as the dollar softened after U.S. consumer price data, which rose slightly more than expected in August, but core prices were flat. A lower U.S. currency makes dollar-denominated metals cheaper for holders of other currencies. Stocks Slide A trend of falling LME inventories has helped support metal prices in recent months. Latest LME data showed copper stocks slipped 2,950 tonnes to 384,200 tonnes, having fallen from 6-1/2 year highs at 555,075 tonnes in mid-February.