Copper drops for second straight day

Weak economic report takes toll on red metal price

Copper prices dropped for second straight day in three weeks on Thursday, 24 September, 2009 at Comex and LME. Prices fell today once again on back of weak economic reports and soaring LME inventories.

At USA, copper futures for December delivery slid 9.85 cents (3.5%) to 2.7095 a pound. Copper fell 2.6% last week. Copper ended August, 2009, higher by 7%.

On the London Metal Exchange, copper for delivery in three months ended lower by $168 (2.7%) at $5,960 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 89.2%.

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 Thursday, the dollar index, which measures the strength of dollar against a basket of other currencies, rose by almost 0.6%.

The National Association of Realtors in US reported on Thursday, 24 September, 2009 that resale of U.S. homes dropped 2.7% in August to a seasonally adjusted annual rate of 5.1 million, the first decline in five months. Sales fell in three of four regions last month, with only the West showing a small increase of 2.7%.

As per latest reports, copper stockpiles in warehouses monitored by the London Metal Exchange increased 14% this month.

In the currency market on Wednesday, the dollar erased early gains. The dollar index, which measures the strength of dollar against a basket of other currencies, fell by almost 0.2%.

At the MCX, copper for November delivery closed at Rs 288.7/Kg. The closing price was Rs 10.5/Kg (3.5%) lower than previous closing price. Prices rose to a high of Rs 298.75/ Kg and fell to a low of Rs 287.8/Kg during the day's trading.

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.

Among other metals traded in the LME on Thursday, lead fell 1.6% to $2,205 a ton and zinc rose 0.1% to end at $1,904 a ton. Nickel fell 1.6% to end at $17,600. Aluminium fell 0.7% to $1,860 a ton.