Copper turns strong

Prices end higher as job data raises hopes of economic recovery

Base metal prices ended higher on Friday, 05 March 2010. Prices rose as the dollar fell against the euro increasing metal's appeal against an alternate investment. The dollar fell due to stronger than expected job data.

At USA, copper futures for March delivery ended higher by 5 cents (1.5%) at $3.42 a pound. In February, copper ended higher by 7.1%. Copper ended FY 2009 higher by 140%. For the week, copper gained 3.5%.

At LME, copper for delivery in three months ended higher by $82 (1.1%) at $7,480. 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%.

In the currency market on Friday, the dollar gained ground initially but then slipped. The dollar index, which weighs the strength of the dollar against a basket of six other currencies initially went up by 0.4% but failed to sustain its gain and ended fractionally lower.

Among key economic data, the Labor Department in US reported on Friday that U.S. nonfarm payrolls declined for the 25th time in the past 26 months, falling by 36,000 in February to a seasonally adjusted 129.5 million. The nation's jobless rate was steady at 9.7%. Job losses in February were concentrated in construction, schools, transportation, insurance, and publishing sectors.

A day before copper fell after US data showed today that pending home sales for January dropped 7.6% month-over-month in a surprise decline.

The metal reached a seven-week high earlier during the week after an earthquake disrupted mining in Chile, the world's largest producer. The price has climbed 6.3% in three sessions.

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.

Among other metals traded in the LME on Friday, lead ended 0.7% higher at $2,185 a ton and zinc ended 0.3% lower at $2,260 a ton. Nickel ended 0.6% lower to end at $22,300. Aluminum ended 0.3% higher at $2,226 a ton.