Red metal manages to curtail losses

Prices drop for first time in four sessions

Copper prices fell at Comex on Tuesday, 15 December, 2009. Prices dropped as the dollar gained again curbing the appetite for base metals as an alternate investment.

At USA, copper futures for March delivery ended lower by 1.05 cents (0.3%) to 3.1415 a pound. Earlier, prices dropped to the extent o 1.3%. Last week, copper ended lower by 3.1%. Copper ended November 2009 higher by 6.6%. On a year to date basis, copper has climbed 116%.

On the London Metal Exchange, copper for delivery in three months ended lower by $17 (0.3%) at $6,895 a metric ton. On 3 July, 2008, prices had touched an all time intra day high of $8,940.

Losses of the red metal price were trimmed today following the industrial production report. The Federal Reserve said industrial production rose 0.8% in November, the strongest gain since August. Capacity utilization reached 71.3% in November from a 70.6% rate in the previous month.

In the currency market on Tuesday, the dollar index, which weighs the strength of dollar against a basket of six other currencies rose by almost 0.8%.

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 323.45/Kg. The closing price was Rs 1.25/Kg (0.4%) lower than previous closing price. Prices rose to a high of Rs 328.8/ Kg and fell to a low of Rs 321/Kg during the day's trading.

Among other metals traded in the LME on Tuesday, lead lost 0.2% to $2,335 a ton and zinc rose 0.4% to end at $2,344 a ton. Nickel was little changed at $16,906. Aluminium gained 0.3% at $2,265 a ton.