Contracts for the future purchase of copper jumped the most in a month yesterday after record holiday sales in the US, the world's second-biggest consumer of the metal after China, triggered optimism that demand will hold steady.
Shopaholics:
Industry Insights Get the scoop on what's happening in the retail world. Learn More
US retail sales during Thanksgiving rose 16 per cent to US$52.4 billion, according to the National Retail Federation.
Copper for three-month delivery climbed 3.1 per cent to US$7,452 a metric tonne in early trading on the London Metal Exchange (LME). Prices increased by up to 3.5 per cent.
Recent price drops of the commodity have helped to improve profit margins for the five publicly listed cable companies in the Middle East including Oman Cables and Elsewedy Electric. Copper has declined about 25 per cent since its peak in February this year. "Working investment savings for the copper cable business could amount to as much as $33 per tonne, for every $100 fall in copper prices," said Ahmed Hafez, an analyst at AlembicHC in Dubai.
But that trend could be short-lived as price drops triggered bargain-hunting demand.
LME copper stockpiles yesterday dropped 0.5 per cent to 392,775 tonnes, according to daily exchange figures. Inventories in Asia, where the top global copper user China is located, shrank for a 42nd straight session.
Metals also gained on speculation the US Federal Reserve may begin a third round of asset purchases to fuel the US economy.
The Fed will start another programme next quarter, 16 of the 21 primary dealers of US government securities that trade with the central bank said in a Bloomberg News survey last week.
Other commodities also rose. Nickel for three-month delivery on the LME advanced 2.4 per cent to $17,365 a tonne. Aluminium rose 1.6 per cent to $2,024 a tonne and zinc gained 1.6 per cent to $1,940 a tonne.
Tin climbed 0.2 per cent to $20,745 a tonne and lead advanced 1.7 per cent to $2,038 a tonne. Gold for immediate delivery gained 1.9 per cent to 1715.09 an ounce. Silver gained 3 per cent to $32.195 an ounce, and platinum rose 1.9 per cent to $1,559.75 an ounce.
* with Bloomberg News
Ind_Insights">Follow us
