Copper ends on a mixed mode

Prices drop at LME but rise at Comex
Base metal prices ended lower for the fifth consecutive day at LME on Monday, 01 February 2010. Rising LME inventories and tightening monetary policies in China offset a stronger than expected batch of economic reports. But prices rose at Comex due to the weak dollar.
At USA, copper futures for March delivery ended higher by 2.75 cents (0.9%) to $3.08 a pound. This year, till date, copper is lower by 8%. Copper ended FY 2009 higher by 140%.
At LME, copper for delivery in three months ended lower by $150 (2.2%) at $6,600. 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%.
Among economic data expected for the day, The Institute for Supply Management in US reported on Monday, 01 February 2010, that its index rose to 58.4 in January 2010 from 54.9 in December 2009. A figure of 56 was expected by market. It is the highest reading since August 2004.
Readings over 50% in the ISM diffusion index indicate that more firms are growing than contracting. The report indicated that nation's manufacturing firms were growing at a very strong pace in January 2010.
But enthusiasm over the report was a bit tempered by a steeper-than-expected 1.2% drop in construction spending during December. Separately, personal income during December was up 0.4% in a slightly sharper increase than had been expected, but spending during December increased at a softer-than-expected pace of 0.2%. Core personal consumption expenditures increased just 0.1% month-over-month, but that was in-line with expectations.
In the currency market on Monday, the dollar index, which weighs the strength of dollar against the basket of six other currencies fell by almost 0.2%.
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 higher by Rs 4.6 (1.5%) at Rs 316.05/Kg. Prices rose to a high of Rs 317.1/Kg and fell to a low of Rs 307.8/Kg during the day's trading.
Among other metals traded in the LME on Monday, lead ended 3.2% lower at $1,960 a ton and zinc dropped 1.7% to end at $2,074 a ton. Nickel dropped 0.5% to end at $18,500. Aluminum added 0.1% to end at $2,080 a ton.