Copper rose for a second day in New York as orders to draw metal from inventories jumped the most in 11 months, feeding speculation that demand will outpace supply in 2011.

Canceled warrants, as the orders are known, surged 45 percent, the most since April 21, to 15,525 metric tons, daily London Metal Exchange figures showed today. LME inventories of copper shrank for the first time in six sessions. Prices also gained as figures showed that euro-area industrial orders increased for a fourth month in January.

"We know that copper is in deficit this year," said Andrey Kryuchenkov, an analyst at VTB Capital in London. "In the long run, people remain bullish."

Copper for May delivery added 9.5 cents, or 2.2 percent, to $4.408 a pound at 8:21 a.m. on the Comex in New York. The metal for three-month delivery climbed 2.1 percent to $9,691 a ton on the LME. Aluminum reached the highest price since September 2008 as all of the six main metals traded on the LME gained.

Copper demand will exceed supply by 889,000 tons this year, Barclays Capital estimated in a March 15 report. The International Copper Study Group is predicting a 435,000-ton shortfall for refined metal this year, more than the shortage of 306,000 tons in 2010.

Eoin Treacy's view Copper remains a leader among the industrial metals. It broke upwards to a new closing high in December and encountered resistance in the region of $4.50. It has since pulled back to test the psychological $4 area which marks the previous peak and currently coincides with the 200-day MA. A sustained move below that area would be required to check medium-term scope for additional upside.

The Chilean and Peruvian markets are particularly leveraged to copper prices. Following an impressive 2-year rally, the Chilean index posted a larger reaction following a loss of momentum from November. It found support above the psychological 20,000 level and is currently below, but in the region of, the 200-day MA. A sustained move above 22,000 would further emphasise the return of demand in the region of the MA.

The Peruvian market broke out of a yearlong range in September and rallied to test the 2007 peak near 24,000. Following sharp pullback it found support above the 200-day MA this week and a sustained move below 20,000 would be required to begin to question potential for some additional upside.

A large number of copper shares, such as Southern Copper, Grupo Mexico, Antofagasta and Freeport-McMoRan Copper have also pulled back to test their 200-day MAs and appear to the be in the process of finding support.