Copper down 3% as dollar strengthens

Print this page Posted on : 09-24-2008 by recycleinme.com

Copper tumbled more than three per cent on Monday on profit-taking spurred by a firmer dollar and as investors worried about the impact of a $700-billion US financial bailout plan. Copper for delivery in three months on the London Metal Exchange was down $95 at $7,155 by 0955 GMT, after hitting a session low of $7,030 and slipping from Monday's high of $7,333, its highest since September 4.

"The strengthening of the dollar is the predominant factor, but clearly there is profit-taking as well," said RBS commodity strategist, Mr Stephen Briggs. The dollar clawed back ground after tumbling to a six-week low against the euro overnight, as initial exuberance about Washington's $700 billion answer to the financial crisis subsided. Some analysts have said a nearly 8,000-tonne fall in LME copper inventories, primarily from the Gwangyang and Busan warehouses in Korea, suggested demand from China.

STILL VOLATILE

Copper is down around 20 per cent compared to its record high of $8,940 a tonne hit in April, as lack of demand from China, coupled with global financial market turmoil prompted investors to dump their positions.

Aluminium, used in transport, packaging and power, was down $18 at $2,530. On Monday, it hit a one-week high of $2,577. Lead was at $1,970 from Monday's close of $1,990, after hitting a high of $2,020 in earlier trade, its highest since September 4. Tin was at $17,600 from $17,600/17/700 at close on Monday, while nickel was trading $50 higher at $17,450.

Source : Business Line