Copper remains strong for second straight day

All base metals gain other than aluminum

Copper prices ended higher for the second straight day at Comex on Monday, 26 April 2010. Persisting problems surrounding Greece and its budgetary deficit kept metal prices strong. However, a strong dollar restricted metals' gains. But last week's strong housing data kept prices steady.

At USA, copper futures for July delivery ended higher by 1.75 cents (0.5%) at $3.548 a pound on Monday. Last week, prices lost 1.9%. In March, copper gained 7.5%. Copper gained about 6% for the first quarter, buoyed by data from the U.S. and other countries reinforced expectations that the global economic recovery was on track. On a year to date basis, in 2010, copper is higher by 5%.

Prices have increased by almost 72.5% in the past twelve months due to higher imports from China. Copper ended FY 2009 higher by 140%.

On Monday, at LME, copper for delivery in three months ended higher by $45 (0.6%) at $7,795. Prices had crossed the $8,000 mark for first time since 2008 on 6 April. On 3 July, 2008, prices had touched an all time intra day high of $8,940.

In the currency market on Monday, the dollar index, which measures the strength of the dollar against basket of six other currencies rose by 0.2%. The euro slipped as German Chancellor Angela Merkel said in a press conference, that aid would be provided to Greece if necessary and if Greece meets certain conditions, cautioning that an aid deal still needs to be worked out.

The Commerce Department in US had reported on Friday, 23 April 2010 that sales of new homes in US surged 27% in March to a seasonally adjusted annual rate of 411,000 after hitting a record low in February. The increase in sales was boosted by soon-to-expire tax break, low mortgage rates, and favorable weather. It was the largest percentage gain in sales since April 1963. It was the highest sales pace since July, and much stronger than the 335,000 expected. Sales in December, January and February were revised higher. In February, sales were revised to a 324,000 annualized pace, up from 308,000. It's still the lowest on record, dating to 1963. Sales are up 24% compared with March 2009, but are down 70% from the peak in 2005.

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%.

At the MCX, copper for April delivery closed higher by Rs 0.05 (0.01%) at Rs 345/Kg. Prices rose to a high of Rs 347.5/Kg and fell to a low of Rs 344.45/Kg during the day's trading.

Among other metals traded in the LME on Monday, lead ended 0.2% higher at $2,330 a ton and zinc ended 0.4% higher at $2,430 a ton. Nickel ended 0.8% higher at $27,325. Aluminum ended 1.6% lower at $2,315 a ton.