Markets
Copper gets a lift from weak dollar
(China Daily/Agencies)
Updated: 2009-11-13 08:57
Copper, little changed, may gain today as a weakening US currency drives investors to purchase commodities as a hedge against accelerating consumer prices.
The US dollar hovered just above a 15-month low against a basket of major currencies hit on Wednesday, on the view that US interest rates will remain low well into next year.
The metal used in construction and automobiles may also gain after China's industrial production expanded the most in 18 months, adding to optimism the world's largest copper user will lead the global economic recovery.
The country's imports of the metal and its products fell to a nine-month low last month, and inventories in Shanghai grew last week to a five-year high.
"The economic data and lower import numbers are good for prices, but the ever-expanding stockpiles are looming over investors' heads," said Zhang Dajiang, a senior analyst at Pioneer Metals Group.
"We're really just trading sideways at the moment as the market is faced with mixed signals."
Copper for delivery in three months on the London Metal Exchange (LME) added as much as 0.7 percent to $6,586 a metric ton, and traded at $6,545 in Singapore.
February-delivery copper on the Shanghai Futures Exchange added as much as 0.9 percent to 51,380 yuan ($7,527) a ton and ended the day at 51,250 yuan.
The metal has more than doubled this year as the dollar lost 7.8 percent against a basket of currencies of six main trading partners.
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Chile's state copper think tank, Cochilco, raised its copper price forecast for 2010 to an average of $2.70 per lb from $2.10 per lb, citing robust Chinese demand and economic recovery. It also lowered its forecast for Chile's 2009 copper output to 5.38 million tons.
Codelco, the world's top copper producer, will start talks with its Chinese customers next week, after it raised term premiums to Japanese and Korean buyers.
Among other LME-traded metals, zinc rose 0.6 percent to $2,198 a ton, lead gained 0.4 percent to $2,313 a ton, and nickel added 1.1 percent to $17,030 a ton.
Aluminum was unchanged at $1,965 a ton, while tin was little changed at $14,750 a ton in Singapore.
