Copper rises for third straight day

Prices gain as manufacturing activity increases in US

Copper prices rose at Comex and LME on Tuesday, 01 December, 2009 for the third straight day. Prices rose riding on upbeat economic reports in China and US. The weak dollar also boosted copper prices.

At USA, copper futures for March delivery ended higher by 5.5 cents (1.7%) to 3.2035 a pound. Copper ended November 2009 higher by 6.6%. On a year to date basis, copper has climbed 124.7%.

On the London Metal Exchange, copper for delivery in three months ended higher by $90 (1.3%) at $7,020 a metric ton. On 3 July, 2008, prices had touched an all time intra day high of $8,940.

In the currency market on Tuesday, the dollar weakened as concerns eased over Dubai's debt problem. The dollar index, which measures the strength of the dollar against a basket of six other currencies, fell by almost 0.8%.

In economic news, the Institute for Supply Management reported in U.S that manufacturing activity in US improved in November for the fourth straight month, although at a slower pace than in October. Another report showed that signed sales contracts on existing homes rose for the ninth straight month in October in US. These reports also boosted the demand for crude.

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

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.

At the MCX, copper for February delivery closed at Rs 325.4/Kg. The closing price was Rs 4.65/Kg (1.45%) higher than previous closing price. Prices rose to a high of Rs 325.8/ Kg and fell to a low of Rs 320/Kg during the day's trading.

Among other metals traded in the LME on Tuesday, lead added 2.1% to $2,395 a ton and zinc added 1% to end at $2,344 a ton. Nickel rose 0.9% to end at $16,395. Aluminium was up 1.3% at $2,085 a ton.