Copper May Rise on Dollar Slide; Lead Gains to Four-Month High

(Bloomberg) -- Copper may advance in London on speculation declines in the dollar will accelerate investor demand for the metal used in plumbing and power plants.

The U.S. currency reversed gains and fell against the euro and declined for a sixth day against the yen. Copper has climbed 29 percent this year as an index of the dollar against six currencies including the euro and the pound has dropped 4.1 percent.

``The dollar is helping to support commodity prices,'' said Leon Westgate, a metals analyst at Standard Bank Ltd. in London. ``The main driver is money flow.''

Copper for delivery in three months gained $10 to $8,585 a metric ton as of 12:48 p.m. on the London Metal Exchange. Prices yesterday rose to $8,661, the highest since May 2006 when copper gained to a record $8,880 a ton.

The higher prices have curbed demand in China, the world's biggest user, said Eric Yan, head of China trade at Triland Metals Ltd. in London.

``If copper goes up to $10,000, Chinese demand will be dramatically reduced,'' he said. ``Chinese demand is quite weak and I don't think it will recover very soon.''

Nickel rose $400 to $33,600 a ton. Prices have climbed 15 percent since a strike began Feb. 28 at a Colombian mine owned by BHP Billiton Ltd. The workers are still on strike, Illtud Harri, a spokesman for BHP in London, said in an e-mail today.

Global nickel inventories in warehouses monitored by the London Metal Exchange dropped 120 tons to 47,592 tons, the exchange said today in its daily warehouse report. Supplies are little changed this year.

 

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MGIC Plans Stock Sale to Bolster Mortgage Insurance

(Bloomberg) -- MGIC Investment Corp., the largest U.S. mortgage insurer, said it will sell shares to increase capital.

Part of the money raised will be used to boost sales, the Milwaukee-based company said late yesterday in a statement. MGIC plans to decide on the size of the stock offering by ``mid to late March,'' and the company may consider other ways of raising capital, it said.

MGIC needs to raise capital to avoid a downgrade of its claims-paying ability after a record fourth-quarter loss of $1.47 billion, Fitch Ratings said Feb. 25. The insurer said Feb. 13 it hired an adviser to help raise money.

Mortgage insurers, which reimburse lenders when borrowers don't repay their debt, are facing a surge in claims amid the worst housing slump in 25 years.

 

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