Copper prices rise the most in five weeks

Red metal rises for third straight day

Copper prices ended higher for third straight day at Comex on Wednesday, 21 July 2010. Prices rose the most in five weeks after Freeport-McMoRan Copper & Gold Inc., the world's biggest publicly traded producer, said the metal's outlook is “positive.” Prices also rose due to continuous drop in LME inventories in recent months.



At USA, copper futures for September delivery ended higher by 10 cents (3.3%) at $3.1 a pound on Wednesday. Last week, copper ended lower by 4.1%. 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 6.5%.

On Wednesday, at LME, copper for delivery in three months ended higher by $219 (3.3%) at $6,860. 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%.

LME-monitored copper inventories fell for the twenty- fourth straight day to 417,625 tons, the lowest level since middle of November 2010.

Fed Chairman Bernanke, made his semiannual monetary policy report to the Senate Banking Committee this afternoon. Bernanke spoke of continued uncertainty in the economy and made note of the Fed's preparations to take more policy actions as needed.

In the currency market on Wednesday, the dollar index, which measures the strength of the dollar against a basket of six other currencies rose by 0.6%.

The U.S. buys about 13% of the 17 million metric tons of copper sold annually and China buys about 20%. Copper fell for three months in a row through June on concern about efforts to curb growth in China, the world's biggest user of the metal.

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 for August delivery ended higher by Rs 8.3 (2.6%) at Rs 322.55/Kg. Prices rose to a high of Rs 323.6/Kg and fell to a low of Rs 314.15/Kg.

Among other metals traded in the LME on Wednesday, lead ended 3.8% higher at $1,868 a ton and zinc ended 2.7% higher at $1,900 a ton. Nickel ended 1.8% higher at $19,325. Aluminum ended 1.1% higher at $1,995 a ton