Sep 07, 2011 NEW YORK (Dow Jones)--Copper futures climbed Wednesday as firmer global equities markets and increased investor appetite for risk drew buyers to the industrial metal.
The most actively traded copper contract, for December delivery, was recently up 7.7 cents, or 1.9%, at $4.133 a pound on the Comex division of the New York Mercantile Exchange.
Major global stock indexes were mostly higher Wednesday, supported by hopes for a jobs plan to be announced Thursday by President Barack Obama and a ruling from a German court upholding the first bailout package for debt-laden Greece.
Copper is sensitive to the economic outlook because of its widespread uses in construction and manufacturing, and the metal can track equities markets as a proxy for growth expectations and investor sentiment toward risky assets such as commodities.
The Dow Jones Industrial Average was recently up 161 points at 11301.
"With equities markets recovering, that's providing some extra support for the copper market," said Sterling Smith, an analyst with Country Hedging. Smith said a weaker U.S. Dollar also provided the metal with a boost Wednesday.
Dollar-denominated copper futures can rise as the dollar falls, as the weaker greenback makes the futures cheaper for buyers using other currencies. The ICE U.S. Dollar Index, which tracks the currency against those of some major U.S. trading partners, was at 75.789, down from about 75.929 late Tuesday in New York as investor demand for risky assets hit the safe-haven currency.
Copper Tuesday fell to its lowest levels in almost two weeks, as the market came under pressure from worries that the developed world could slip into a recession and hit copper demand from key sectors such as housing and manufacturing.
Copper has been supported for much of the last year by the view that mine supply growth will fail to meet rising global demand, but the threat of a renewed global slowdown has held investors interest recently and generally trumped the influence of supply and demand factors.
Workers at Peruvian copper mining company Sociedad Minera Cerro Verde began a 48-hour strike Wednesday, a union leader said. Workers are demanding higher pay, and threaten an indefinite strike later this month if an agreement is not reached. Cerro Verde is majority owned by Freeport-McMoRan Copper & Gold Inc. (FCX).