Alcoa's earning report boosts metal prices

Prices also get boosted by a weak dollar

Copper prices ended higher at Comex on Tuesday, 13 July 2010. Prices rose following strong earning report from Alcoa and due to weak dollar.



At USA, copper futures for September delivery ended higher by 1 cent (0.3%) at $3.0175 a pound on Tuesday. Last week, copper ended higher by 4.7%. For second quarter, copper dropped 16%. 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 lower by 9.8%.

On Tuesday, at LME, copper for delivery in three months ended higher by $55 (0.8%) at $6,685. 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. Copper ended FY 2009 higher by 140%.

After Monday's close, aluminum giant Alcoa reported that second quarter revenue grew by 22% surpassing expectations. The company also said that metal prices are expected to remain high in coming months and that aluminum demand will rise by 12% in the coming year.

Among economic reports scheduled for the day, the Commerce Department reported that the nation's trade deficit widened to its largest level in eighteen months due to climbing imports which surpassed rising exports.

On Tuesday, Moodys Investor Services downgraded Portugal's sovereign debt ratings by two notches from A1 to Aa2. This once again rekindled fears in the eurozone front and upset the recent revival in investor confidence over the global economic recovery but the same failed to derail the major indices from their session highs.

In the currency market on Tuesday, the dollar index, which measures the strength of the dollar against a basket of six other currencies fell by 0.7%.

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

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.

At the MCX, copper prices ended lower by Rs 1 (0.31%) at Rs 311.75/Kg. Prices rose to a high of Rs 312.8/Kg and fell to a low of Rs 309.15/Kg.

Among other metals traded in the LME on Tuesday, lead ended 0.3% higher at $1,875 a ton and zinc ended 1.1% higher at $1,898 a ton. Nickel ended 1.1% higher at $17,800. Aluminum ended 1.2% higher at $1,995 a ton.