Copper shines despite firm dollar

Strong economic data boosts copper price

Copper prices rose on Monday, 21 September, 2009 at Comex and LME. Prices rose despite the strong dollar. Strong economic data pulled up copper price.

At USA, copper futures for December delivery gained 2.05 cents (0.7%) to 2.8055 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 $15 (0.2%) at $6,290 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 92.6%.

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

In economic news, the Conference Board said Monday that its index of leading economic indicators rose 0.6% in August, the fifth straight increase.

In the currency market on Monday, the dollar index, which measures the strength of dollar against a basket of other currencies, rose by 0.5%.

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

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 Monday, lead fell 0.2% to $2,180 a ton and zinc climbed 0.7% to end at $1,925 a ton. Nickel rose 1.2% to end at $17,350. Aluminium rose 0.2% to $1,919 a ton.