Copper becomes strong

Prices double on a year to date basis

Copper prices rose on Friday, 23 October, 2009 at Comex and LME. Better than expected and strong housing report pulled up the copper price.

At USA, copper futures for December delivery ended higher by 3.65 cents (1.2%) to 3.0345 a pound. During the week prices crossed the $3 mark for the first time in FY 2009. Copper ended the week higher by 6.6%. Copper ended September, 2009, lower by 0.3%.

On the London Metal Exchange, copper for delivery in three months ended almost higher by $59 (0.9%) at $6,649 a metric ton. On 3 July, 2008, prices had touched an all time intra day high of $8,940.

Before September, it was the eight straight monthly gain for copper. On a year to date basis, prices are higher by 99.4%.

Record first-half shipments into China, the biggest copper consumer, and a weaker dollar helped double the value of the metal this year. China's economy, the world's third-largest, grew 8.9% in the third quarter from a year earlier.

The U.S. buys about 13% of the 17 million metric tons of copper sold annually and China buys about 20%.

In the latest housing report, it was stated that purchases of previously occupied homes jumped 9.4% from August to a 5.57 million annual rate, more than forecast and the highest since July 2007.

In the currency market on Friday, the dollar index, which calculates the strength of the dollar against a basket of six other currencies rose by almost 0.4%. Earlier during the week, it had dropped to fourteen month lows.

In FY 2008, copper prices dropped by 54%. Prior to 2008, copper prices ended FY 2007 with a gain of mere 5.5% after a whopping 44% gain in FY 2006. The price of copper gained every year since 2002 as global economic growth boosted demand for the metal used in pipes and wires.