Copper prices gain on China's demand
Monday, 14 December 2009
NEW YORK, Dec 13 (Bloomberg): Copper prices rose, halting a six- session slide, as China's industrial output increased more than forecast in November and the country's imports of the metal climbed from a nine-month low.
Factory output in China, the world's biggest metal consumer, surged 19 per cent from a year earlier, the statistics bureau said. Analysts projected 18 per cent. Imports of copper and related products jumped 10 per cent from October, the customs office said. Copper prices have more than doubled this year as China's imports gained to a record in the first half.
"The bottom line is we think underlying consumption is booming," said Max Layton, an analyst at Macquarie Bank Ltd. in London.
Copper futures for March delivery rose 3 cents, or 1 per cent, to $3.133 a pound on the Comex division of the New York Mercantile Exchange. The price dropped 4.8 per cent in the previous six sessions.
This week, inventories monitored by the Shanghai Futures Exchange fell 8.6 per cent to 95,676 metric tonnes, the lowest since early October.
The drop was "bullish on a two- to three-month view," Layton said.
Copper pared gains after reports on the US economy increased speculation the Federal Reserve will raise borrowing costs, boosting the dollar.
Confidence among US consumers increased in December and retail sales last month advanced more than analysts forecast. The greenback rose to a five-week high against a basket of six major currencies, curbing demand for commodities as an alternative asset.
"Looking into next week, if the dollar continues to climb, it will put a crimp on commodities in general and also copper," said William O'Neill, a partner at Logic Advisors in Uppper Saddle River, New Jersey. "We'll probably be dominated by dollar movements for the rest of the year."
Copper for delivery in three months rose 0.4 per cent to $6,835 a metric tonne ($3.10 a pound) on the London Metal Exchange.
Aluminum, nickel, lead and zinc prices also climbed in London. Tin fell.
Factory output in China, the world's biggest metal consumer, surged 19 per cent from a year earlier, the statistics bureau said. Analysts projected 18 per cent. Imports of copper and related products jumped 10 per cent from October, the customs office said. Copper prices have more than doubled this year as China's imports gained to a record in the first half.
"The bottom line is we think underlying consumption is booming," said Max Layton, an analyst at Macquarie Bank Ltd. in London.
Copper futures for March delivery rose 3 cents, or 1 per cent, to $3.133 a pound on the Comex division of the New York Mercantile Exchange. The price dropped 4.8 per cent in the previous six sessions.
This week, inventories monitored by the Shanghai Futures Exchange fell 8.6 per cent to 95,676 metric tonnes, the lowest since early October.
The drop was "bullish on a two- to three-month view," Layton said.
Copper pared gains after reports on the US economy increased speculation the Federal Reserve will raise borrowing costs, boosting the dollar.
Confidence among US consumers increased in December and retail sales last month advanced more than analysts forecast. The greenback rose to a five-week high against a basket of six major currencies, curbing demand for commodities as an alternative asset.
"Looking into next week, if the dollar continues to climb, it will put a crimp on commodities in general and also copper," said William O'Neill, a partner at Logic Advisors in Uppper Saddle River, New Jersey. "We'll probably be dominated by dollar movements for the rest of the year."
Copper for delivery in three months rose 0.4 per cent to $6,835 a metric tonne ($3.10 a pound) on the London Metal Exchange.
Aluminum, nickel, lead and zinc prices also climbed in London. Tin fell.