Copper edges higher as lower prices prompt buying
December 23, 2009
Copper prices edged higher in Europe on Wednesday, reflecting gains in most industrial metals, as lower prices attracted buyers back to the market, helping to offset the negative effect of the stronger dollar.
"On copper, $6 800 (R52 598) seems to be a fairly good support area, and on the approach to that it does seem there is bargain hunting," said William Adams, an analyst at Basemetals.com.
"If we carry on seeing the dollar rebound, the base metals will react negatively to that, but we may need to get the end of the year out of the way first."
Reports that union workers at Chile's Chuqicamata copper mine complex had rejected an early wage offer from owner Codelco on Tuesday have also raised some fears over supply, analysts said.
PRICES
* Three-month copper on the London Metal Exchange was trading at $6,914 a tonne at 10:10 SA time compared with $6,881 at the close on Tuesday.
* Aluminium was at $2,245 a tonne from $2,242.
DATA/EVENTS
* US new home sales numbers for November, 17:00 SA time.
* US commerce dept releases November building permits revision.
* US November personal income/spending data, due 17:30 SA time.
* US Reuters/University of Michigan final consumer sentiment data for December, 16:55 SA time.
* US weekly mortgage market index, due 14:00 SA time.
* Bank of England policy meeting minutes published, 11:30 SA time.
MARKET NEWS
* The US dollar notched a two-month top on the yen in Asia on Wednesday and stayed firm elsewhere thanks to upbeat US economic news and the steepest yield curve on record. The euro remained on the defensive.
* Oil held steady above $74 on Wednesday, buoyed by industry data showing a sharp drawdown in US crude stocks and an unexpected fall in gasoline supply, but the firm dollar limited gains.
* Asian shares edged higher on Wednesday led by a spurt in Australian stocks to a three-week high, while financial bookmakers expect the leading European benchmark indexes to rise on Wednesday, extending a sharp two-day winning run.
FUNDAMENTALS
* Union workers at Chile's massive Chuquicamata copper mine complex scrapped an early wage offer from owner Codelco on Tuesday, the union said, raising the specter of a strike at the world's top copper producer.
* Transport of zinc concentrate from Australia's Century mine to a coastal port has restarted 11 weeks after a burst pipeline forced smelting companies to seek other supplies, mine owner MMG said on Wednesday.
* China's steel industry association lauded the achievements of the sector after a year spent berating its members for ignoring market signals and "blindly expanding capacity".
* South Korea has bought 6 000 tonnes of aluminium ingot for shipping between February 1 and March 31 to the port of Incheon, the state-run Public Procurement Service (PPS) said.
* Freeport-McMoRan Copper & Gold Inc has agreed 2010 fees to convert copper concentrate into finished metal of $46.50 a tonne and 4.65 cents a pound with Japanese smelters, Bloomberg reported.
* China plans to build reserves of strategically important minor metals and rare earth in 2010, and will push for consolidation in the industry, the official Shanghai Securities News said on Wednesday, quoting a government official.
TECHNICALS
* Copper support at $6 750, resistance at $7 170, 14-day RSI at 51.1.
* Aluminium support at $2 120, resistance at $2 350, 14-day RSI at 59.8. - Reuters
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