Copper climbs back

Red metal registers gains on demand hopes

Copper prices stopped their downward journey and ended higher on Monday, 12 October, 2009 at Comex and LME. Prices rose at Comex and LME following the weak dollar and strong demand hopes in the coming months.

At USA, copper futures for December delivery ended higher by 1.9 cents (0.7%) to 2.857 a pound. Copper gained 5.8% last week. Copper ended September, 2009, lower by 0.3%.

On the London Metal Exchange, copper for delivery in three months ended higher by $43 (0.7%) at $6,278 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 91.7%.

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 Monday, the dollar firmed up initially after Fed Chairman, Ben Bernanke said last week that the central bank will tighten monetary policy when the economic outlook shows sufficient improvement. But then, with rally in equities, the dollar lost its ground. The dollar index fell by 0.5% today.

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 293.15/Kg. The closing price was Rs 0.1/Kg (0.03%) higher than previous closing price. Prices rose to a high of Rs 295.4/ Kg and fell to a low of Rs 292.7/Kg during the day's trading.