Copper drops

Prices shed yesterday's gains partly

Copper prices dropped on Thursday, 22 October, 2009 at Comex and LME. The strong dollar and the weak economic data were mainly responsible for this.

At USA, copper futures for December delivery ended lower by 3.8 cents (1.3%) to 2.998 a pound. Yesterday prices crossed the $3 mark for the first time in FY 2009. Copper ended September, 2009, lower by 0.3%.

On the London Metal Exchange, copper for delivery in three months ended almost unchanged at $6,590 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 98.2%.

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 Thursday, the dollar index, which calculates the strength of the dollar against a basket of six other currencies rose by almost 0.2%. Earlier during the day, it rose by almost 0.6%.

The Labor Department in US reported on Thursday, 22 October, 2009 that initial claims for state unemployment benefits rose for the week that ended on 17 October, 2009, after two straight weekly declines. First-time claims for the week ended 17 October were up 11,000 to 531,000. The prior week's claims level was revised higher by 6,000 to stand at 520,000.

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 308.2/Kg. The closing price was Rs 0.9/Kg (0.3%) lower than previous closing price. Prices rose to a high of Rs 311.8/ Kg and fell to a low of Rs 307.1/Kg during the day's trading.

Among other metals traded in the LME on Thursday, lead lost 1% to $2,426 a ton and zinc added 0.4% to end at $2,230 a ton. Nickel slid 1% to end at $19,550. Aluminium gained 0.6% to $1,977 a ton.