BASE METALS: Comex Copper Hits 4-Week High On Europe Hopes
26 Oktober 2011 - 4:18PM
Dow Jones News
Copper futures climbed Wednesday as investors bet European
leaders were close to a credible plan to tackle the euro-zone debt
crisis, easing worries that the region's financial struggles would
cut demand for industrial metals.
The most actively traded copper contract, for December delivery,
was recently up 14.2 cents, or 4.2%, at $3.5625 a pound on the
Comex division of the New York Mercantile Exchange. Futures rose as
high as $3.585 a pound, the highest intraday price since Sept.
22.
Copper extended its earlier gains Wednesday as German lawmakers
approved an expanded mandate for the euro zone's bailout fund. The
news wasn't unexpected, but it raised hopes that the summit of
European Union leaders later in the day would result in a plan
likely to ease the risk of a credit crunch in the currency
union.
The euro surged to a six-week high against the U.S. dollar after
the news, easing the pressure on dollar-denominated copper futures.
A weaker greenback makes the futures cheaper for buyers using other
currencies.
Copper futures have largely tracked developments in the euro
zone, as a worsening debt crisis there could rattle industrial
markets. The metal is sensitive to the growth outlook because of
its widespread uses across industries.
"Although supply-side developments are very supportive for
copper prices, investors are more concerned with demand prospects
at this stage," MF Global analyst Edward Meir said in a note.
Supply developments were again supportive Wednesday, as
Freeport-McMoRan Copper & Gold Inc. (FCX) invoked force
majeure, a contract provision allowing it to suspend shipments from
its Grasberg mine in Indonesia. The ongoing labor strike there has
"impacted our ability to fully perform our sales commitments," said
Ramdani Sirait, a spokesman for Freeport's Indonesian
subsidiary.
Copper prices were supported for much of the last year by the
view that copper supply would fall short of rising global
demand.
-By Matt Day, Dow Jones Newswires; 212-416-4986;
matt.day@dowjones.com
--Deden Sudrajat contributed to this article.
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