Copper drops for first time in five days

Prices drop as the dollar inches up

Copper prices ended lower for first time in five days on Thursday, 19 November, 2009 at Comex. Prices rose to its highest levels in fourteen months yesterday. But on Thursday, it dropped due to the dollar and economic data.

At USA, copper futures for March delivery ended lower by 2.95 cents (0.9%) to 3.106 a pound. Earlier during the week, on Monday, it had touched a high of $3.142.

On the London Metal Exchange, copper for delivery in three months ended lower by $85 (1.2%) at $6,795 a metric ton. On 3 July, 2008, prices had touched an all time intra day high of $8,940.

In the currency market on Thursday, the dollar strengthen up against its previous days' position but continued to remain at its weak levels. The dollar index, which measures the strength of dollar against basket of six other currencies, rose by almost 0.2% paring majority of its earlier gains.

The Labor Department in US reported on Thursday, 19 November that the number of people filing initial claims for state unemployment benefits was flat at a seasonally adjusted 505,000 in the week ended 14 November. Initial claims are at the lowest level since early January, but they have hovered above 500,000 for 53 straight weeks, contributing to a 26-year high in the U.S. unemployment rate at 10.2%.

The Conference Board in US reported on Thursday, 19 November, 2009 that the index of leading economic indicators rose for the seventh consecutive month in October, showing that a recovery is "unfolding" in the U.S. economy. The leading indicators rose 0.3% in October after a 1% gain in September.

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

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 317.3/Kg. The closing price was Rs 0.3/Kg (0.09%) higher than previous closing price. Prices rose to a high of Rs 319.9/ Kg and fell to a low of Rs 315.7/Kg during the day's trading.

Among other metals traded in the LME on Thursday, lead slid 0.3% to $2,397 a ton and zinc gained 1% to end at $2,269.5 a ton. Nickel gained 0.3% to end at $17,130. Aluminium was unchanged at $2,066 a ton.