Copper brightens

Prices register considerable rise on demand hopes

Copper prices rose considerably higher at Comex and LME on Wednesday, 23 December 2009. Prices rose due to demand hopes and ailing dollar.

At USA, copper futures for March delivery ended higher by 6.55 cents (2.1%) to 3.2035 a pound. Last week, copper remained almost unchanged. Copper ended November 2009 higher by 6.6%. On a year to date basis, copper has climbed 117%.

On the London Metal Exchange, copper for delivery in three months ended higher by $119 (1.7%) at $7,000 a metric ton. On 3 July, 2008, prices had touched an all time intra day high of $8,940.

The National Association of Realtors in US reported a day ago on 22 December 2009 that resale of U.S. homes increased by 7.4% to 6.54 million in November, 2009 boosting the demand for red metal.

Also, China's copper imports rose 15% last month from October.

In the currency market on Wednesday, the dollar index, which weighs the strength of dollar against the basket of six other currencies fell by almost 0.7%.

Latest reports showed that inventories tallied by the London Metal Exchange rose 0.4% today to 482,775 metric tons. Global supplies, monitored by the LME and exchanges in Shanghai and New York, have surged 75% this year.

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 February delivery closed at Rs 324.4/Kg. The closing price was Rs 2.2/Kg (0.67%) lower than previous closing price. Prices rose to a high of Rs 326.25/Kg and fell to a low of Rs 322.55/Kg during the day's trading.

Among other metals traded in the LME on Wednesday, lead gained marginally to end at $2,328 a ton and zinc gained 3.2% to end at $2,510 a ton. Nickel gained 2.9% to end at $18,300. Aluminium rose 0.6% to end at $2,257 a ton.