Red metal drops again

Prices drop in tandem with other commodities

Copper prices at Comex ended lower on Thursday, 13 October 2011. Red metal prices dropped in tandem with other commodities following a rising dollar and not-so-much exciting set of economic data.

Copper for December delivery ended lower by 9 cents (2.6%) at $3.31 a pound at Comex on Thursday. 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.



Red metal prices for three-month-delivery at LME fell $180 (2.3%) to $7,330 a metric ton on Thursday.

The Labor Department reported today that initial jobless claims inched down by 1,000 last week to 404,000. Market was expected a figure around 406,000. Initial claims from two weeks ago were revised up to 405,000 from an original reading of 401,000. The average of new claims over the past four weeks fell by 7,000 to stand at 408,000, marking the lowest level since mid-August. The monthly average is seen as a more accurate gauge of labor trends because it smoothes out volatility in the week-to-week data.

In another report, government data showed that the U.S. trade deficit remained virtually unchanged in August but the U.S. still managed to post a record monthly trade gap with China. The nation's trade deficit held steady at $45.6 billion in August from the prior month. The trade gap in July was revised up from the initial estimate of $44.8 billion. After two months of deficits above $50 billion, the trade gap narrowed in July by 11.4%. This is the largest percentage decline since May 2009.

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

Among other traded metals at LME on Thursday, lead in London dropped 1.5% to $2,003 a ton and nickel dropped 3.6% to $18,500 a ton. Aluminum closed 2.2% lower at $2,209 a ton, and zinc closed lower by 2.8% at $1,913 a ton.

At the MCX, copper prices for November delivery ended higher by Rs 5.25 (1.4%) at Rs 363.5/Kg. Prices rose to a high of Rs 368.1/Kg and fell to a low of Rs 360.55/Kg.