Copper drops for first time in three sessions

Rising inventory hammers red metal price

Copper prices fell for the first time in three sessions on Wednesday, 07 October, 2009 at Comex and LME. Prices fell at Comex and LME due to rising inventories and steady dollar.

At USA, copper futures for December delivery ended lower by 0.5 cents (0.2%) to 2.7795 a pound. Copper dropped 2.2% last week. It was the fifth straight weekly drop for copper. Copper ended September, 2009, lower by 0.3%.

On the London Metal Exchange, copper for delivery in three months ended marginally lower by 0.3% at $6,095 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 90%.

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

As per latest report, in warehouses monitored by the London Metal Exchange have jumped 35% since mid-July.

In the currency market on Wednesday, the dollar index, which measures the strength of dollar against a basket of other currencies, rose by almost 0.3%.

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 286.85/Kg. The closing price was Rs 0.15/Kg (0.05%) lower than previous closing price. Prices rose to a high of Rs 289.6/ Kg and fell to a low of Rs 284.75/Kg during the day's trading.

Among other metals traded in the LME on Wednesday, lead added 0.5% to $2,160 a ton and zinc added 1.9% to end at $1,922 a ton. Nickel added 0.9% to end at $18,300. Aluminium rose 0.6% to $1,832 a ton.