Copper witnesses little gains

Codelco workers sign wage agreement and reduce supply concerns

Copper prices ended little higher at Comex on Tuesday, 05 January 2010. A wage accord being signed by management and workers of Codelco reduced concerns about the impending strike. Price dropped at LME.

At USA, copper futures for March delivery ended higher by 0.75 cents (0.2%) to 3.4135 a pound. It was the seventh straight session rise for copper. Copper ended FY 2009 higher by 140%.

At LME, copper for delivery in three months ended lower by $36 (0.5%) at $7,464. On 3 July, 2008, prices had touched an all time intra day high of $8,940.

As per latest reports, workers at Codelco's Chuquicamata mine and management at Altonorte signed a wage accord after reaching agreement on terms late yesterday. Codelco offered to increase wages by 4% and boosted a bonus payment to 12.1 million pesos.

Copper ended substantially higher last year on expectations of revived global economic growth along with a decline in the dollar. The metal was also pushed higher by record first-half imports to China, the world's largest user.

Also in China, an industry report showed that manufacturing in China, the world's biggest metals user, expanded last month by the most since April 2004.

In the currency market on Tuesday, the dollar index, which weighs the strength of dollar against the basket of six other currencies rose by almost 0.2% following disappointing home sales data. Earlier, dollar index was down by almost 0.2%.

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 unchanged at Rs 347.35/Kg. Prices rose to a high of Rs 348/Kg and fell to a low of Rs 344.25/Kg during the day's trading.

Among other metals traded in the LME on Tuesday, lead dropped marginally to end at $2,478 a ton and zinc shed 0.8% to end at $2,554 a ton. Nickel shed 1.8% to end at $18,727. Aluminium rose 0.6% to end at $2,280 a ton.