Red metal stays steady

Prices fluctuate following a weaker than expected housing data

Copper prices ended marginally higher at Comex on Monday, 19 July 2010. Prices oscillated following a weaker than expected housing data at Wall Street.



At USA, copper futures for September delivery ended higher by 1 cent (0.3%) at $2.94 a pound on Monday. 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 12%.

On Monday, at LME, copper for delivery in three months ended marginally lower by $1 at $6,512. 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%.

At Wall Street, a report showed today that homebuilders in July grew more pessimistic about industry conditions as a federal tax credit for home buyers expired. The National Association of Home Builders/Wells Fargo housing market index fell to 14 in July from a downwardly revised 16 in June.

The Labor Department in US reported last Friday, 16 July 2010 that U.S. consumers prices for goods and services fell slightly in June, mainly because of lower gasoline costs. The consumer-price index dropped a seasonally adjusted 0.1%, the third straight monthly decline. The closely followed core rate, seen as a better gauge of inflationary trends, rose 0.2% for the biggest gain since October 2009.

The biggest decrease in consumer prices in June occurred in energy, mostly gasoline for autos as well as electricity. Energy prices fell 2.9% for the second month in a row.

In the currency market on Monday, the dollar index, which measures the strength of the dollar against a basket of six other currencies rose by 0.2%. But the dollar slipped against the euro.

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 higher by Rs 2.25 (0.73%) at Rs 308.45/Kg. Prices rose to a high of Rs 309.4/Kg and fell to a low of Rs 306.7/Kg.

Among other metals traded in the LME on Monday, lead ended 0.3% lower at $1,775 a ton and zinc ended 0.2% lower at $1,813 a ton. Nickel was almost unchanged at $18,850. Aluminum ended 0.1% lower at $1,972 a ton.