Copper continues to go down continues

Depressed US stocks weigh on red metal

Copper prices continued to register fall at Comex and LME on Tuesday, 01 September, 2009. Drop in US stocks once again renewed concerns about the global economic recovery thereby pushing red metal prices lower on demand concerns.

At USA, copper futures for December delivery fell 0.8 cents (0.3%) to 2.8185 a pound. Last week, copper ended higher by 2%. Copper ended August, 2009, higher by 7%.

On the London Metal Exchange, copper for delivery in three months ended lower by $275 (4.2%) at $6,200 a metric ton. On 3 July, 2008, prices had touched an all time intra day high of $8,940.

After August, it was the eighth straight monthly gain for copper. Prices gained 23% in the second quarter. On a year to date basis, prices are higher by 89%.

The U.S. buys about 13% of the 17 million metric tons of copper sold annually and China buys about 20%.

In the currency market on Tuesday, the dollar index, which weighs the strength of dollar, against a basket of six other currencies ended rose by 0.6%.

On Wall Street, stocks were solidly lower as the financial sector bore the brunt of bearish analyst comments and investors' concerns about a market correction that could last well into fall.

Among economic reports expected on Tuesday, The Institute for Supply Management reported on Tuesday, 01 September, 2009 that its index rose to 52.9% in August above the 50.5% expected. It was higher than the 48.9% in July. It's the highest reading since June 2007. Activity at the nation's manufacturing firms expanded for the first time in 19 months.

In FY 2008, copper prices dropped by 54%. Prior to 2008, copper prices ended FY 2007 with a gain of mere 5.5% after a whopping 44% gain in FY 2006. The price of copper gained every year since 2002 as global economic growth boosted demand for the metal used in pipes and wires.

At the MCX, copper for November delivery closed at Rs 305.45/Kg. The closing price was Rs 1.7/Kg (0.55%) lower than previous closing price. Prices rose to a high of Rs 313.2/ Kg and fell to a low of Rs 304/Kg during the day's trading.

Among other metals traded in the LME on Tuesday, lead fell 2.2% to $2,060 a ton and zinc fell 1.9% to end at $1,835 a ton. Nickel fell 1.4% to end at $18,760. Aluminium fell 1% to end at $1,881 a ton.