Copper gains on LME

Print this page Posted on : 11-05-2009 by recycleinme.com

London, Nov. 4

Copper rose 2.6 per cent on Wednesday as the dollar fell ahead of a policy decision by US Federal Reserve later in the day that is also expected to give clues on the state of the world's largest economy.

By 1103 GMT, copper for three-month delivery on the London Metal Exchange rose to $6,595 a tonne from $6,460 at the close on Wednesday and compared with a session high at $6,625.

The red metal, used in power and construction, touched a near two-week low at $6,372.25 on Tuesday on dollar strength.

Markets expect the US Federal Reserve will leave rates unchanged after its two-day meeting but will look for signs on future rate and monetary policies.

''We're tracking sideways with huge volatility, which reflects the uncertainty we have in the wider environment,'' said Mr Robin Bhar, an analyst at Calyon. ''We suspect the Fed is going to stay with its rhetoric that recovery is slow ... the dollar may weaken on the back of that, which will bolster all these other risk assets like metals.''

''(But) there is a feeling that this week, things are back on track,'' he added. ''Last week was a down week with soft economic numbers, but people are now a bit more confident.''

Capping gains, copper stocks rose 250 tonnes to remain near six-month highs at 374,050 tonnes, signalling that demand has yet to recover outside China. China is the world's largest metals consumer.

On the supply side, striking workers at Chile's Spence copper mine entered the third week of a strike after government-mediated talks over salaries with owner BPH Billiton failed.

In other metals, aluminium, used in transport and packaging, rose $24 to $1,932 a tonne. Steel-making ingredient nickel traded at $18,250 from $17,800, while battery material lead was at $2,325 from $2,270.

Zinc traded at $2,228 a tonne from $2,180 and tin was at $14,950 from $14,790.

Source : Business Line