Copper reverses direction

Prices rise for the first time in five sessions

After four consecutive sessions of drop, copper prices rose on Tuesday, 15 September, 2009 at Comex and LME. Prices rose today following set of upbeat economic reports that hit the wires at Wall Street today.

At USA, copper futures for December delivery rose 4.05 cents (1.4%) to 2.845 a pound. Copper fell 0.7% last week. Copper ended August, 2009, higher by 7%.

On the London Metal Exchange, copper for delivery in three months ended higher by $65 (1.1%) at $6,205 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 92%.

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

Federal Reserve Chairman, Bon Bernanke commented today that the current recession is likely over.

The dollar strengthened initially today following a batch of upbeat economic reports. But then, as investors turned towards equities, dollar pared its gains. In the currency market on Tuesday, the dollar index, which measures the strength of dollar against a basket of other currencies, fell by 0.2%.

Among economic reports expected, The New York Federal Reserve Bank reported on Tuesday, 15 September, 2009 that manufacturing activity in the New York area rebounded to its highest level since the recession began in late 2007. As per the report, the bank's Empire State Manufacturing index rose to 18.9 in September from 12.1 in August. This is the seventh straight increase in the index. Nearly 40% of manufacturers reported that conditions had improved in September while 20% said conditions had worsened.

In a separate report, the Commerce Department reported on Tuesday, 15 September, 2009 that U.S. retail sales rose a seasonally adjusted 2.7% in August, the biggest increase in more than three years. Market was expecting a figure around 2.3%. Sales are down 5.3% compared with a year earlier.

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 306.25/Kg. The closing price was Rs 4.65/Kg (1.5%) higher than previous closing price. Prices rose to a high of Rs 306.9/ Kg and fell to a low of Rs 300.65/Kg during the day's trading.

Among other metals traded in the LME on Tuesday, lead rose 3.8% to $2,102 a ton and zinc rose 0.8% to end at $1,845 a ton. Nickel rose 0.4% to end at $16,400. Aluminium rose 1.1% to $1,832.75 a ton.