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Copper Prices Rebound as Dollar Slips on Economic, Fed Concerns

India Puts Duty on Some China Aluminium Imports

LONDON, June&nbsp;24 -- Copper prices rebounded from a four- week low as a weaker dollar made the metal cheaper for buyers with other currencies.
&nbsp;&nbsp;&nbsp; The U.S. Dollar Index, a gauge of the greenback's value, fell as much as 1.3 percent on speculation that the Federal Reserve will temper prospects for an interest-rate increase tomorrow and as U.S. home resales trailed forecasts. Some investors buy commodities, mostly traded in dollars, when the currency weakens to preserve purchasing power.
&nbsp;&nbsp;&nbsp; &quot;We're seeing a snap-back in copper today in reaction to the weaker dollar,&quot; said Matthew Zeman, a trader at LaSalle Futures Group in Chicago. &quot;The dollar has been a big factor for a lot of the commodities lately.&quot;
&nbsp;&nbsp;&nbsp; Copper for September delivery jumped 6.8 cents, or 3.2 percent, to $2.212 a pound on the New York Mercantile Exchange's Comex division. Earlier, the price touched $2.1235, the lowest since May 28.
&nbsp;&nbsp;&nbsp; Yesterday, the metal fell 5.2 percent, the steepest decline since Feb. 17, after the World Bank forecast a deeper global recession than estimated earlier. The dollar index, which includes the euro, yen and U.K. pound, gained 0.6 percent yesterday, the most in a week.
&nbsp;&nbsp;&nbsp; Copper pared gains today as the National Association of Realtors reported sales of previously occupied U.S. homes rose 2.4 percent in May to an annual rate of 4.77 million, less than estimated by analysts in a Bloomberg News survey. The median projection of 74 economists and analysts was for a sales pace of 4.82 million last month.
&nbsp;&nbsp;&nbsp; Price Outlook 
&nbsp;&nbsp;&nbsp; Robin Bhar, an analyst at Credit Agricole SA's Calyon unit in London, predicted prices for industrial metals will continue to decline, citing skepticism about the potential for a global economic rebound and the strength of demand from China.
&nbsp;&nbsp;&nbsp; Copper, used in pipes and electrical wiring, has climbed 57 percent this year as refined copper imports by China rose. The Asian nation, the world's largest consumer of the metal, accounted for 38 percent of global copper demand in the first quarter, 11 percentage points more than a year earlier, Barclays Capital estimates.
&nbsp;&nbsp;&nbsp; &quot;I sense disillusionment over the &lsquo;green shoots' of recovery and concerns that China's growth is now slowing,&quot; Bhar said by telephone today. &quot;We are probably a bit too high, given the demand and supply fundamentals that we are seeing.&quot;
&nbsp;&nbsp;&nbsp; Copper for three-month delivery rose $44, or 0.9 percent, to $4,805 a metric ton ($2.18 a pound) on the London Metal Exchange, the world's largest metals bourse.
&nbsp;&nbsp;&nbsp; Price Outlook 
&nbsp;&nbsp;&nbsp; The price is likely to fall in the third quarter before rebounding in the following three months, said Bhar, who advised buying the copper when futures decline.
&nbsp;&nbsp;&nbsp; &quot;I don't really see a collapse in prices much below the $4,000 level&quot; in the next quarter, he said.
&nbsp;&nbsp;&nbsp; China's refined copper imports are expected to slow in the third quarter after climbing to a record in May. Imports may drop to about 300,000 tons in the next quarter, said Yoshihiro Nishiyama, marketing director at Pan Pacific Copper Co., Japan's biggest smelter of the metal.
&nbsp;&nbsp;&nbsp; Imports of copper into China were 748,281 tons in the first quarter and totaled 655,177 tons in April and May, according to government figures.
&nbsp;&nbsp;&nbsp; Among other LME metals for three-month delivery, nickel advanced 0.8 percent to $14,610 a ton. Aluminum rose 2 percent to $1,605 a ton, and lead gained 1 percent to $1,618 a ton. Zinc climbed 1.1 percent to $1,519 a ton and tin jumped 1.4 percent to $14,595 a ton.
&nbsp;&nbsp;&nbsp; (Source: Bloomberg)
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