Copper continues to tarnish

Prices drop as LME inventories stack up

Copper prices continued to fall on Thursday, 10 September, 2009 at Comex and LME. Prices fell as traders anticipated that supply will oust demand thus year.

At USA, copper futures for December delivery fell 5.75 cents (2%) to 2.8665 a pound. Copper fell 2.8% last week. Copper ended August, 2009, higher by 7%.

On the London Metal Exchange, copper for delivery in three months ended lower by $130 (2%) at $6,286 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 91%.

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

Inventories of copper monitored by LME rose for a 10th day, gaining 0.2% to 317,575 tons, the highest since May.

In the currency market today, the dollar index, which measures the strength of dollar against a basket of other currencies, fell by 0.4%.

In its latest report, Goldman Sachs reported that it has forecast copper to reach $7,650 a ton at the end of 2010.

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 308.5/Kg. The closing price was Rs 3.95/Kg (1.3%) lower than previous closing price. Prices rose to a high of Rs 315.85/ Kg and fell to a low of Rs 304.5/Kg during the day's trading.

Among other metals traded in the LME on Thursday, lead fell 12% to $2,115 a ton and zinc fell 3.1% to end at $1,910 a ton. Nickel fell 3.6% to end at $17,300. Aluminium fell 1.8% at $1,855 a ton.