Copper at five week high

Red metal registers gains following strike and China report

Strike at a mine at Peru and strong economic report from China pushed copper prices to five week high on Monday, 19 October, 2009 at Comex and LME. Prices also rose as the dollar declined.

At USA, copper futures for December delivery ended higher by 12.1 cents (4.3%) to 2.9665 a pound. Copper ended September, 2009, lower by 0.3%.

On the London Metal Exchange, copper for delivery in three months ended higher by $240 (3.9%) at $6,470 a metric ton. On 3 July, 2008, prices had touched an all time intra day high of $8,940.

Before September, it was the eight straight monthly gain for copper. On a year to date basis, prices are higher by 97%.

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

Workers in Peru started a 48-hour strike today, demanding better pension benefits and a greater share of mining profits.

In the currency market on Monday, the dollar came under further pressure after the Federal Reserve Bank of New York clarified it has been testing reverse-repurchase agreements for technical reasons, and that the tests shouldn't be seen as hints of a tighter monetary policy, which might ordinarily be bullish for the U.S. currency. The dollar index, which measures the strength of the dollar against a basket of six other currencies, fell by 0.3%.

In a latest report, it was reported yesterday that China, the world's second biggest oil consumer, saw economic growth at an estimated rate of 9% in the third quarter. That's up sharply from 7.9% growth in the second quarter and 7.1% over the first half of the year.

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 gained 1.2% to $2,230 a ton and zinc added 0.5% to end at $2,064 a ton. Nickel gained 1.1% to end at $18,900. Aluminium gained 0.4% to $1,913 a ton.