Copper rises on back of economic data

Copper prices end mixed at Comex and LME

Strong economic data pushed copper prices higher on Wednesday, 17 February 2010. Prices rose as a stronger than expected housing report and industrial production data hit the wires at Wall Street today.

At USA, copper futures for March delivery ended higher by 1.95 cents (0.6%) at $3.259 a pound. Last week, copper gained 8.4%. This year, till date, copper is lower by 5%. Copper ended FY 2009 higher by 140%.

At LME, copper for delivery in three months ended marginally lower by $14 (0.2%) at $7,130. On 3 July, 2008, prices had touched an all time intra day high of $8,940.

Copper ended substantially higher last year on expectations of revived global economic growth along with a decline in the dollar. The dollar index had dropped almost 4.2% last year. The metal was also pushed higher by record first-half imports to China, the world's largest user.

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

Among economic report scheduled for the day, the Labor Department in US reported on Wednesday, 17 February 2010 that the prices of goods imported into the United States jumped 1.4% in January, the sixth straight increase. The increase was led by higher prices for oil and gas. Also, The Federal Reserve in US reported on Wednesday that industrial production registered a 0.9% increase in January 2010, the seventh straight monthly gain. For the past year, industrial production has also risen by 0.9%. The report showed that manufacturing output had the sharpest increase since August, but all major subcomponents of production showed improvement.

Separately, the Commerce Department in US reported on Wednesday, 17 February 2010 that housing starts in US rose 2.8% to a seasonally adjusted annual rate of 591,000, the highest level since July. Housing starts for December were revised higher. In December, starts were revised to an annual rate of 575,000, up from 557,000 previously.

In the currency market on Wednesday, the dollar index, which weighs the strength of dollar against the basket of six other currencies rose by almost 1%.

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 higher by Rs 1.4 (0.42%) at Rs 328.7/Kg. Prices rose to a high of Rs 331.3/Kg and fell to a low of Rs 325.7/Kg during the day's trading.

Among other metals traded in the LME on Wednesday, lead ended 1% higher at $2,320 a ton and zinc ended unchanged at $2,325 a ton. Nickel ended 1.2% lower to end at $19,975. Aluminum ended 0.3% lower at $2,115 a ton.