BLBG: Copper Advances for Second Day as Dollar Declines Against Euro
By Anna Stablum
Oct. 20 (Bloomberg) -- Copper rose for a second day in New York and London as the dollar continued to fall against the euro.
The euro climbed as high as $1.4994, the highest level since August 2008. The dollar dropped as better-than-expected corporate earnings stoked demand for higher-yielding assets and figures showed that builders in the U.S. broke ground on fewer houses than anticipated. A weaker dollar makes metals priced in the currency cheaper for holders of other monies.
“Investors should look for additional signs of an economic recovery, a still-weaker U.S. dollar and firmer credit conditions as a prelude to a further industrial metals rally,” Bart Melek, global commodity strategist at BMO Capital Markets in Toronto, said today in a report.
December-delivery copper gained 1.35 cents, or 0.5 percent, to $2.98 a pound on the New York Mercantile Exchange’s Comex unit at 9:25 a.m. local time. The contract rose as high as $2.999, the highest since Sept. 26, 2008. Copper for three-month delivery added 0.9 percent to $6,530 a metric ton on the London Metal Exchange.
Caterpillar Inc., the world’s largest maker of construction equipment, reported third-quarter profit of 64 cents a share, beating the 5-cent average estimate of analysts in a Bloomberg survey. Housing starts rose 0.5 percent to an annual rate of 590,000 in September, Commerce Department figures showed today. That was below the forecast of a 610,000 rate, the median of 76 projections in a Bloomberg News survey.
BHP Strike
“The U.S. housing sector is only slowly regaining momentum,” said David Thurtell, an analyst at Citigroup Inc. in London. “It will be some time before the sector is a significant consumer of copper and other base metals again.”
BHP Billiton Ltd., the world’s biggest mining company, said its Spence mine in northern Chile is still producing copper at a “reduced rate” as a strike by workers enters an eighth day. Prices rose yesterday as miners in Peru, the world’s third- largest copper supplier and second-biggest zinc producer, began a nationwide strike.
In Peru, about 27,000 workers at a dozen mining companies walked off their jobs yesterday, said Luis Castillo, the Mining Federation’s general secretary. Miners want a bigger allocation of earnings after copper prices more than doubled this year.
Among other LME metals for three-month delivery, zinc rose as much as 2 percent to $2,155 a ton, the highest intraday price since May 28 last year. It was last at $2,141.50.
Aluminum rose 0.8 percent to $1,960 a ton, and tin gained 0.7 percent to $14,675 a ton. Nickel climbed 0.2 percent to $19,305 a ton, and lead advanced 2.6 percent to $2,348 a ton.
