Red metal hammered again

Demand concerns from China hit metal prices
Base metal prices ended lower on Wednesday, 20 January 2010. Prices fell as the dollar headed up strongly and on demand concerns from China.
At USA, copper futures for March delivery ended lower by 8.7 cents (2.5%) to 3.36 a pound. Last week, copper ended lower by 3.5%. This year, till date, copper is lower by 3.2%. Copper ended FY 2009 higher by 140%.
At LME, copper for delivery in three months ended lower by $170 (2.3%) at $7,375. On 3 July, 2008, prices had touched an all time intra day high of $8,940.
Copper ended substantially higher last year on expectations of revived global economic growth along with a decline in the dollar. The dollar index had dropped almost 4.2% last year. The metal was also pushed higher by record first-half imports to China, the world's largest user.
The U.S. buys about 13% of the 17 million metric tons of copper sold annually and China buys about 20%.
In the currency market on Wednesday, the dollar index, which weighs the strength of dollar against the basket of six other currencies rose by almost 1.1%. The dollar strengthened on fears that China will curb bank lending. The China Banking Regulatory Commission said it hasn't "specifically" told banks to suspend lending in January, but a report said that it had asked several banks to stop issuing loans.
In FY 2008, copper prices dropped by 54%. Prior to 2008, copper prices ended FY 2007 with a gain of mere 5.5% after a whopping 44% gain in FY 2006. The price of copper gained every year since 2002 as global economic growth boosted demand for the metal used in pipes and wires.
At the MCX, copper for February delivery closed lower by Rs 6.4 (1.8%) at Rs 341.35/Kg. Prices rose to a high of Rs 348/Kg and fell to a low of Rs 340.2/Kg during the day's trading.
Among other metals traded in the LME on Wednesday, lead ended little lower at $2,42145 a ton and zinc dropped marginally to end at $2,490 a ton. Nickel dropped 1.2% to end at $19,060. Aluminium shed 0.4% to end at $2,284 a ton.