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Copper Climbs for Second Day on Expectation Weaker Dollar to Buoy Demand
Sep 29,2010 14:34CST
industry news
Source:SMM

Sep 29 (Bloomberg) -- Copper advanced for a second day, heading for its best quarter in a year, as expectations for a weaker dollar buoyed the demand outlook for commodities.

Copper for three-month delivery on the London Metal Exchange gained as much as 0.4 percent to $7,984.25 a metric ton and traded at $7,966 at 10:41 a.m. Singapore time. January- delivery copper on the Shanghai Futures Exchange added 0.5 percent to 60,680 yuan ($9,075) a ton.

"Commodities will continue to be in the hands of the dollar and economic data,” Xi Bingrong, an analyst at Huishang Futures Co., said from Anhui. "The expectation is for dollar weakness in the months ahead and that will keep prices supported.” A stronger U.S. currency boosts the cost of dollar- denominated commodities for holders of other monies.

The dollar was little changed against the euro, after touching $1.3596 yesterday, the weakest since April 15. The Institute for Supply Management-Chicago Inc. is forecast to report tomorrow that its business barometer fell to 55.7 this month from 56.7 in August, according to the median estimate of economists in a Bloomberg News survey. A level greater than 50 signals expansion.

"Prices are moving in thin volumes as Chinese investors prepare for the upcoming holiday,” said Xi. "I doubt we’ll see any major moves until that liquidity comes back.” China’s financial markets are closed from Oct. 1 to Oct. 7 for the National Day holiday.

Copper, used in construction and automobiles, has jumped 22 percent since the end of June, on track for its best quarterly performance since the period ending Sept. 30, 2009, as the Dollar Index dropped about 8.1 percent. The metal recovered from its worst quarter since 2008 as falling stockpiles improved the demand outlook, said Xi.

Copper stockpiles in London Metal Exchange warehouses dropped to 375,275 tons yesterday, the lowest level since November. Shanghai inventories declined to 94,365 tons last week.

Aluminum and lead in London were little changed at $2,310 a ton and $2,280 a ton respectively. Zinc declined 0.6 percent to $2,206 a ton, nickel lost 0.2 percent to $23,210 a ton and tin lost 0.2 percent to $23,951 a ton.


           

 

 


 

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