Copper stays weak

Concerns over global growth impact prices

Copper prices at Comex ended lower on Tuesday, 06 September 2011. Prices dropped as the dollar headed up. Copper also declined amid concern that the euro-zone nations will be unable to control the sovereign-debt crisis, damping the outlook for the global economy and curb demand for raw materials.



Copper for December delivery ended lower by 7 cents (1.7%) to end at $4.06 a pound at Comex on Tuesday. Copper ended the month of August lower by 6.3%.

Red metal prices at LME retreated as much as 1% to $8,870 a metric ton.

Latest data at Wall Street showed that the U.S. services sector showed unexpected improvement in August from the month before, with the Institute for Supply Management's services index climbing to 53.3 last month from 52.7 in July. It was greater than the 51.0 that had been expected.

In the currency market on Tuesday, the dollar index, which measures the strength of the dollar against a basket of six other currencies, rose by 0.9%.

Citigroup yesterday lowered its 2011 copper price forecast by 6.2% to $9,099 a ton citing the bank's reduced economic growth forecast for the U.S., the euro zone and India. Copper, used in power cables and construction, has lost 13% from a record $10,190 touched during mid February.

Copper output in Chile, the world's biggest producer of the metal, is poised to decline this year after snowstorms and strikes hit mines owned by BHP Billiton and Codelco. Chilean output fell 2.2% in the first half to 2.57 million metric tons. The nation produced 5.42 million tons last year.

Among other traded metals at LME on Tuesday, lead in London fell 1.4% to $2,402 a ton and nickel fell 0.9% at $20,700 a ton. Aluminum closed 0.6% lower at $2,372.65 a ton, and zinc closed lower by 0.2% at $2,168 a ton.

At the MCX, copper prices for November delivery ended higher by Rs 1.6 (0.4%) at Rs 416.1/Kg. Prices rose to a high of Rs 417.6/Kg and fell to a low of Rs 411.6/Kg.