LONDON, Oct. 26 -- Copper prices jumped to a one-year high after a report showed U.S. home resales last month climbed to the highest rate in more than two years.
Purchases of previously occupied homes jumped 9.4 percent from August to a 5.57 million annual rate, more than forecast and the highest since July 2007, the National Association of Realtors reported today in Washington. Builders are the biggest users of the metal, putting about 400 pounds (181 kilograms) of copper pipes and wiring into the average U.S. home.
"The housing data was very strong today," giving a boost to copper, said Donald Selkin, National Securities Corp.'s chief market strategist in New York. "It adds to the overall picture that the economy is improving and demand is rising."
Copper futures for delivery in December rose 3.65 cents, or 1.2 percent, to $3.0345 a pound on the New York Mercantile Exchange's Comex unit. The metal climbed 6.6 percent this week, the biggest gain since July 17.
Earlier, the metal touched $3.062, the highest since Sept. 29, 2008. The bulge in U.S. home sales occurred in part as buyers rushed to take advantage of a tax credit that is set to expire next month, said Michael Gregory, a BMO Capital Markets senior economist in Toronto.
Futures also rose as the dollar headed for a third straight weekly decline, spurring demand for commodities as an alternative investment. The U.S. Dollar Index, a gauge of value against six currencies, is down 0.2 percent this week, touching a 14-month low on Oct. 21.
Concern that output will be disrupted in South America and Australia also supported copper prices, analysts said. Strikes have hobbled production at some Latin American mines and a mechanical outage has hampered operations at BHP Billiton Ltd.'s Olympic Dam project in Australia.
"Copper is benefiting from a number of factors," said David Thurtell, a Citigroup Inc. analyst in London. "Chief among these are the weaker dollar, strong demand from China and, more recently, concerns over short-term supply due to copper- mine strikes in Chile and the BHP Olympic Dam problems."
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 percent in the third quarter from a year earlier, the government said yesterday.
A strike at BHP's Spence copper mine in Chile entered its 11th day today. Workers and officials from the world's largest mining company expected to continue negotiating a new wage agreement today, according to Andres Ramirez, a union leader. The mine accounts for 1 percent of global copper output, according to Macquarie Bank Ltd.
At Olympic Dam, BHP has said full production will resume by the end of March after repairs to a damaged haul shaft. Until then, output of ore may be reduced to as little as 25 percent of capacity, the company said on Oct. 21.
On the London Metal Exchange, copper for three-month delivery advanced $59, or 0.9 percent, to $6,649 a metric ton ($3.02 a pound).
Among other LME metals for three-month delivery, zinc, aluminum and tin prices rose. Nickel and lead declined.