Mixed batch of economic data helps copper pare earlier losses

Copper ends 12% higher for July 2010

Copper prices ended higher at Comex on Friday, 30 July 2010. Prices pared earlier losses due to mixed batch of economic data at Wall Street on Friday.



At USA, copper futures for September delivery ended higher by 2 cents (0.7%) at $3.31 a pound on Friday. For the month of July, copper ended higher by 12% as concerns about a slowdown in the global recovery abated, pushing the red metal to its best month since April 2009.

Before this, 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 higher by 0.4%.

On Friday, at LME, copper for delivery in three months ended higher by $105 (0.9%) at $7,296.5. 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%.

US stocks dropped earlier during the day following worse than expected second quarter GDP reading.

The Commerce Department in US reported on Friday that U.S. economy expanded at an annualized rate of 2.4% in the second quarter, but that was a bit below the 2.5% that had been widely expected and down from the first quarter's upwardly revised 3.7% growth rate. It was also well below the average 4.4% increase over the past six months. Additionally, personal consumption for the second quarter increased 1.6% after a 1.9% increase in the first quarter.

But then, stocks successfully worked their way off of their lows with help from a better-than-expected Chicago PMI figure and a higher-than-expected consumer sentiment survey from the University of Michigan. Better-than-expected Chicago PMI figure, which came in at 62.3, and the final July Consumer Sentiment Survey, which was stronger-than-expected at 67.8 helped stocks shed most of their earlier losses.

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.