The Cable Directory

Copper prices rose in Asia as global stockpiles fell the most in seven months, signaling consumption may be stronger than expected during the northern hemisphere summer, traditionally a weak demand period due to holidays.

Inventories of copper tracked by the London Metal Exchange fell 2.8 percent to 123,900 metric tons, the LME said yesterday in a daily report. That’s the largest one-day drop since Oct. 17. Stockpiles are at the lowest since Oct. 24. Inventories in China dropped for a second-straight week, the Shanghai Futures Exchange said on June 1.

“With the stock drawdown, it signals that earlier concerns about oversupply in the market have now eased,’’ Yuan Fang, a metals futures trader at Shanghai East Asia Futures Co., said today. Yuan expects stockpiles in Shanghai to decline another 3,000 tons this week.

Copper futures for August delivery on the Shanghai Futures Exchange rose as much as 1,750 yuan, or 2.7 percent, to 67,050 yuan ($8,773) a ton. The most active contract ended the morning session up 2.3 percent at 66,790 yuan a ton.

London Metal Exchange copper for delivery in three months rose as much as 0.2 percent to $7,640 a ton by 12:02 p.m. Shanghai time, after reaching its highest since May 16 yesterday.

The price of metal for immediate delivery in Changjiang, Shanghai’s biggest cash market, rose as much as 1.7 percent to 65,350 yuan a ton today.

Supply Concerns

Copper prices are also being supported by concern that labor disputes in Latin America may disrupt supplies. Codelco, the world’s biggest copper producer, said yesterday it will sign a wage contract with a union at a mine in northern Chile.

Still, workers at Chile’s Dona Ines de Collahuasi copper mine, the country’s third largest, said a preliminary wage offer by Xstrata Plc and Anglo American Plc was too low, increasing the risk of a strike.

The mine in northern Chile will produce about 433,000 tons of copper this year, or about 2.6 percent of global copper output, according to the state-run Chilean Copper Commission.

Elsewhere, workers at six of Grupo Mexico SAB’s Mexican operations, including the Cananea copper mine, Mexico’s largest, and the San Luis de Potosi zinc refinery are planning an indefinite strike from June 10 to push for higher wages, Carmen Romero, a spokeswoman for the 250,000-member Mining Federation said on June 1.

China Equities

The market is also keeping a close watch on Chinese share prices, which are extending a slump that’s wiped out at least $402 billion of market value since the government tripled the tax on securities trade on May 30.

“So far, the selling seems to be taken in stride, although it is too early to tell how far the negative psychology could spread in terms of impacting other markets or local consumer spending,’’ Edward Meir, an analyst at Man Financial, wrote in a report yesterday. “Metals could drift in the next day or two, as markets keep a wary eye on Chinese developments.’’

China’s imports of refined copper and alloys slowed in April from the previous month’s record pace, falling 7.7 percent to 192,069 metric tons. Still, copper imports more than doubled in the first four months of 2007, compared with the same period last year, according to customs data May 25.

“Key to defining sentiment and price direction will be the market’s perception of Chinese demand,’’ said analysts at Standard Bank in a monthly report released June 4. “We think there will be a period of inventory correction, which will mean significantly lower imports in the next few months. This may keep the bulls at bay for a while.’’

Zinc, Aluminum

Zinc futures for August delivery in Shanghai rose 1.2 percent to 30,775 yuan a ton at the end of the morning session. Aluminum futures for August delivery gained 0.7 percent to 19,940 yuan a ton.

London Metal Exchange zinc for delivery in three months fell 1.4 percent to $3,785 a ton at 11:58 a.m. Shanghai time. Aluminum was down 0.4 percent at $2,815 a ton at 11:43 a.m.

Among other LME-traded metals, lead, nickel and tin for delivery in three months were untraded in Asia after settling yesterday at $2,370 a ton, $47,650 a ton and $14,000 a ton, respectively.