Copper down on dollar rebound

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(China Daily/Agencies)
Updated: 2009-11-06 08:39

Copper fell for a second time in three days as the dollar rebounded against a basket of six major currencies, curbing investor demand for commodities priced in the US currency.

The dollar advanced against 15 of 16 major counterparts as a drop in equities outweighed the Federal Reserve's plan to keep interest rates at a record low. The Dollar Index, a weighted measure of the greenback against the currencies of six main trading partners including the euro and yen, rose yesterday after tumbling as much as 1 percent on Wednesday, the most since September 8.

"There is still a lot of uncertainty in the market," Yu Jiaming, an analyst at Jilin Jinchang Futures Co, said from Shanghai yesterday. "The dollar will continue to play a part in determining the direction of commodities."

Copper for delivery in three months on the London Metal Exchange fell as much as 0.9 percent to $6,515 a metric ton and was at $6,532 at 3:46 pm Singapore time. The December-delivery contract on the Comex division of the New York Mercantile Exchange slipped 1.2 percent to $2.9575 a pound.

January-delivery copper on the Shanghai Futures Exchange lost as much as 0.9 percent to 50,650 yuan a ton and ended the day at 50,710 yuan.

"I think some people are selling out of long positions ahead of the US employment numbers (to be released today)," said Yu.

The report will probably show the jobless rate rose to 9.9 percent in October, a 26-year high, and payrolls fell by 175,000, according to the median forecast of economists surveyed. A private report on Wednesday based on payroll data showed companies in the US cut an estimated 203,000 jobs in October, compared with a median estimate of 198,000.

The Federal Open Market Committee specified for the first time that policy will stay unchanged as long as inflation expectations are stable and unemployment fails to decline, it said in a statement on Wednesday.

In other copper-related news, Codelco's Andina copper mine workers are "confident" they can reach a wage deal with management, the company's main employee representative said. This comes after BHP Billiton Ltd, the world's largest mining company, failed to reach an agreement with striking workers at its Spence copper mine in Chile, union officials said on Nov 3.

Among other LME-traded metals, aluminum fell 0.6 percent to $1,914 a ton, zinc slid 0.6 percent to $2,215 a ton and lead lost 1.1 percent to $2,325 a ton. Nickel declined 0.6 percent to $17,800 a ton, and tin dropped 0.5 percent to $14,920 a ton as of 3:21 pm in Singapore.

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