Copper rises for second straight day

Weak dollar pushes up prices

Copper prices ended higher for second straight day on Tuesday, 02 November at Comex. Weak dollar pushed prices higher.



At USA, copper futures for December delivery ended higher by 5 cents (1.4%) at $3.84 a pound on Tuesday. Last week, copper lost 1.8%. The metal rose 2.1% in October, when the metal posted several two-year highs. For September, copper rose 8.3%. That follows 1.5% gains in August and 12% in July. For the third quarter, copper ended higher by 24%. Prices have increased by 33% in the past one year.

On Monday, at LME, copper for delivery in three months ended higher by $6.5 (0.1%) at $8,306. On 3 July, 2008, prices had touched an all time intra day high of $8,940. Copper ended FY 2009 higher by 140%.

Surveys had showed rising manufacturing activity in China, brightening the picture for global growth and, by extension, for oil demand. China's official purchasing manager's index rose to 54.7 in October from 53.8 in September.

In the currency market on Tuesday, the dollar index, which weighs the strength of the dollar against a basket of six other currencies fell by 0.8%. Speculation that any future measures of quantitative easing might be applied gradually or be smaller in scope have kept the dollar volatile in recent times.

In US, the Institute for Supply Management reported on Monday, 01 November 2010 that U.S. manufacturers expanded their business in October at a faster pace than the prior month, suggesting stronger economic growth in the fourth quarter. The report suggested that its index of factory activity rose to 56.9% in October from 54.4% in September, led by growth in autos, computers and exported goods.

The report detailed that new orders index jumped to 58.9% from 51.1% the prior month. New orders are a strong indicator of future sales. Exports are a big source of new orders. The export index for October shot up to 60.5% from 54.5%.

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 November delivery ended higher by Rs 3.3 (0.9%) at Rs 376.35/Kg. Prices rose to a high of Rs 376.9/Kg and fell to a low of Rs 371.55/Kg.

Among other metals traded in the LME on Tuesday, lead ended 0.6% higher at $2,479 a ton and zinc ended 0.1% higher at $2,451 a ton. Nickel added 0.1% to end at $23,253. Aluminum gained 0.5% to end at $2,383 a ton.