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Copper Futures Rally Alongside Stocks On Data
Mar 16,2012 08:47CST
industry news
Source:SMM
Copper futures settled higher, mirroring gains in equities, as stronger manufacturing data signaled a brighter economic landscape for the U.S. while the dollar weakened.

Mar 15, 2012 NEW YORK (Dow Jones)--Copper futures settled higher, mirroring gains in equities, as stronger manufacturing data signaled a brighter economic landscape for the U.S. while the dollar weakened.

The most actively traded contract, for May delivery, rose 4.95 cents, or 1.3%, to settle at $3.8975 a pound on the Comex division of the New York Mercantile Exchange.

The Federal Reserve Bank of New York said its general business conditions index rose to 20.21 in March from 19.53 in February, and was the highest reading since June 2010.

Elsewhere, mid-Atlantic manufacturers have seen better conditions this month, according to the Philadelphia Federal Reserve Bank's index of general business activity within its factory sector. The index rose to 12.5 in March from 10.2 in February, and was at its highest since April 2011.

"The economy is picking up," said Charles Nedoss, senior market strategist with Olympus Futures.

Copper prices tend to rise as business activity picks up pace as the metal is widely used in manufacturing for its ability to easily conduct electricity and resist rust when exposed to water.

A broad rally in equities further bolstered copper prices. The Standard & Poor's 500 index was recently trading at 1400.99, up 0.5%.

"It looks like the S&P could trade up to 1420 by next week and it would probably put some strength into the copper market," said Bob Haberkorn, senior commodity broker with RJO Futures.

A pronounced retreat by the U.S. Dollar fanned investor interest in copper futures. The ICE U.S. Dollar Index slipped 0.5% on the day to trade at 80.131 recently. As the dollar weakens, dollar-denominated commodities like copper appear less expensive to investors using other currencies and they tend to flock to the market as buyers.

"You did see the dollar pull back here after having some strong gains earlier this week," said Haberkorn.

Copper settlements (ranges include electronic and pit trading):
Mar $3.8920; up 5.00 cents; Range $3.8200-$3.8965
May $3.8975; up 4.95 cents; Range $3.8250-$3.9030

 

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