Copper rises again

Weak dollar increases the appeal of copper

Copper prices rose for second straight day on Tuesday, 22 September, 2009 at Comex and LME. Prices rose as the weak dollar increased the appeal of commodities.

At USA, copper futures for December delivery gained 5.9 cents (2.1%) to 2.8645 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 higher by $80 (1.3%) at $6,270 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 94.7%.

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 measures the strength of dollar against a basket of other currencies, fell by almost 0.7%.

Federal Reserve started its two day meet on monetary policy today. The FOMC will release tomorrow a statement on monetary policy that may clarify how the central bank plans to unwind its quantitative easing programs.

At the MCX, copper for November delivery closed at Rs 304.1/Kg. The closing price was Rs 3.35/Kg (1.1%) higher than previous closing price. Prices rose to a high of Rs 306.5/ Kg and fell to a low of Rs 299.5/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 Tuesday, lead rose 0.8% to $2,233 a ton and zinc fell 0.4% to end at $1,918 a ton. Nickel rose 0.3% to end at $17,400. Aluminium fell 2% to $1,889 a ton.