Copper remains almost unchanged

Strong dollar keeps prices under control

Copper prices remained almost unchanged on Tuesday, 29 September, 2009 at Comex but dropped at LME. Prices fell today once again due to the strong dollar.

At USA, copper futures for December delivery ended up by 0.2 cents (0.04%) to 2.729 a pound. Copper fell 1.6% last week. Copper ended August, 2009, higher by 7%.

On the London Metal Exchange, copper for delivery in three months ended lower by $35 (0.6%) at $5,975 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%. In September, prices are headed for the first monthly drop in FY 2009.

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 remained extremely volatile. The dollar gained ground especially against the Japanese currency after the nation's finance minister hinted at the possibility of intervention to arrest the yen's rise. The dollar index, which measures the strength of dollar against a basket of other currencies, rose by almost 0.2%.

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 289.9/Kg. The closing price was Rs 1/Kg (0.34%) lower than previous closing price. Prices rose to a high of Rs 292.8/ Kg and fell to a low of Rs 286.5/Kg during the day's trading.

Among other metals traded in the LME on Tuesday, lead fell marginally to $2,204 a ton and zinc rose marginally to end at $1,882 a ton. Nickel added 0.6% to end at $16,850. Aluminium fell 0.3% to $1,827 a ton.