Copper weakens

Only nickel gains among other base metals at LME

Copper prices ended lower at Comex on Thursday, 22 April 2010. Strong dollar pushed metal prices lower after two consecutive days of rise. Better than expected earning and economic reports in most cases pointed towards higher demand for metals in coming months and restricted the drop.

At USA, copper futures for July delivery ended lower by 5.1 cents (1.4%) at $3.5065 a pound on Thursday. Last week, prices lost 1.5%. 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 3.8%.

Prices have increased by almost 70% in the past twelve months due to higher imports from China. Copper ended FY 2009 higher by 140%.

On Thursday, at LME, copper for delivery in three months ended lower by $69 (0.9%) at $7,690. 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 Thursday, the dollar index, which measures the strength of the dollar against basket of six other currencies rose by 0.5%. The greenback rose for the sixth straight session against a basket of major currencies, including the euro, after the European Union said that Greece's budget deficit was wider than forecast.

Among economic reports expected for the day, The Labor Department in US reported on Thursday, 22 April 2010 that U.S. wholesale prices rose by a seasonally adjusted 0.7% in March 2010, reversing a drop in February. The producer price index has risen by 6% in the past year, led by a 23% rise in energy prices. It's the largest year-over-year gain since September 2008.

Separately, the Labor Department in US reported on Thursday, 22 April 2010 that the number of people filing an initial claim for unemployment benefits declined by 24,000 for the week ended 16 April week to a seasonally adjusted 456,000, the first drop in three weeks. Initial claims are down 27% from a year ago.

Elsewhere, The National Association of Realtors in US reported on Thursday, 22 April 2010 that existing homes rose 6.8% in March to a seasonally adjusted annual rate of 5.35 million from a downwardly revised 5.01 million in February. The figure was more than the expected 5.29 million.

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 lower by Rs 2.85 (0.82%) at Rs 342.95/Kg. Prices rose to a high of Rs 346.2/Kg and fell to a low of Rs 341.1/Kg during the day's trading.

Among other metals traded in the LME on Thursday, lead ended 0.2% lower at $2,308 a ton and zinc ended 0.4% lower at $2,425 a ton. Nickel ended 1.5% higher at $27,150. Aluminum ended 0.4% lower at $2,339 a ton.