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Copper rises 2% on bargain-hunting
London copper futures rallied two per cent yesterday as investors picked up cheaper metal after Thursday's sharp fall, analysts said.
- Reuters
- Published: 00:05 May 3, 2008
London: London copper futures rallied two per cent yesterday as investors picked up cheaper metal after Thursday's sharp fall, analysts said.
Copper for delivery in three months on the London Metal Exchange, often seen as a key gauge of real economic activity, closed up $190 at $8,410 per tonne, reversing an earlier fall of around $50 as the dollar jumped after US payrolls data was released.
On Thursday, copper closed 3.7 per cent lower after touching $8,105 - the lowest level since March 26.
"Copper was sold off quite heavily in the previous session, and people are taking the opportunity to add some length now it's in the low $8,000s, as the fundamental outlook is still tight," said Barclays Capital analyst Gayle Berry.
The most recent data from statisticians, the International Copper Study Group, put the copper market in surplus by 85,000 tonnes in 2008 - a slim margin in an 18 million- tonne market, which is acutely sensitive to supply disruptions such as an ongoing strike at Chilean copper giant Codelco.
Copper is up over 20 per cent this year on low stocks and supply concerns due to strikes in Chile and Mexico.
LME warehouse stocks fell 450 tonnes to 109,625, after dropping nearly 45 per cent so far this year. "It is rather volatile trading at the moment on thin volumes," analyst Marc Elliott at Fairfax said on Friday.
Investors digested the US employment report for April which came in better than forecasted, boosting the dollar. The Labour Department said 20,000 jobs were shed last month.
Copper, widely used in the construction and power industries, touched a record high of $8,880 on April 17.
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