Copper witnesses a strong day

Copper once again remains the biggest gainers in the broader metals complex on Monday

Red metal prices at Comex once again ended substantially higher on Monday, 24 October 2011. Red metal prices advanced, helping to extend the biggest rally in industrial metals in two years, as European leaders' plans to aid banks and preliminary China data boosted optimism about the outlook for economic growth.



Copper for December delivery ended higher by 23 cents (7%) at $3.45 a pound at Comex on Monday. Last week, copper shed 5.3%. In the third quarter, copper tumbled 26%, the most since 2008. The metal touched a 14-month low of $2.994 on 3 October, 2011. Copper has slumped 30% from a record $4.6575 a pound on 15 February 2011.

Red metal prices for three-month-delivery at LME rose $316 (5%) to $7,534 a metric ton on Monday.

Commodities tracked equity markets' gains on Monday, as U.S. stocks moved broadly higher following key earnings, with support from Apple and Caterpillar. Better than expected data in the manufacturing zone out of China also helped prices move up.

In the currency market on Monday, the dollar index, which measures the strength of the dollar against a basket of six other currencies, ended lower by 0.3%.

A preliminary monthly survey of Chinese manufacturing conditions, released by HSBC, showed a rise to a five-month high. HSBC's “flash” China Manufacturing Purchasing Managers' Index climbed to 51.1, up from 49.9 in September. Among the survey's key subcomponents, manufacturing output rose to a six-month high of 51.7, from 50.3 in September, and above the 50 level dividing expansion from contraction. Commodities rallied following this report on optimism about China's appetite for raw materials in coming months. Markets were also cautiously optimistic on thoughts that European leaders will agree this week to a comprehensive plan to address the region's debt crisis.

Among other traded metals at LME on Monday, lead in London rose 3.6% to $1,984 a ton and nickel rose 1.7% to $19,125 a ton. Aluminum closed higher by 2.5% at $2,179 a ton, and zinc closed higher by 4.5% at $1,886 a ton.

At the MCX, copper prices for November delivery ended higher by Rs 19.9 (5.5%) at Rs 381.15/Kg. Prices rose to a high of Rs 382.25/Kg and fell to a low of Rs 362/Kg.