BLBG: Copper Has Biggest Monthly Gain Since August on U.S. Growth
By Millie Munshi and Anna Stablum
Feb. 26 (Bloomberg) -- Copper prices rose, capping the biggest monthly gain since August, after a report showed the U.S. economy grew at the fastest pace in more than six years in the fourth quarter and the dollar slid.
Gross domestic product rose at a 5.9 percent annual rate at the end of 2009, the Commerce Department said today. The dollar fell for a third day against a basket of six major currencies. Copper prices have more than doubled in the past year as the weaker greenback boosted investor interest and consumption increased as the economy recovered.
“Demand for commodities is going to continue to be strong,” said William O’Neill, a Logic Advisors partner in Upper Saddle River, New Jersey. “The uptrend in copper will continue and we’ll see higher prices as we move through the year.”
Copper futures for May delivery jumped 7.4 cents, or 2.3 percent, to $3.284 a pound on the New York Mercantile Exchange’s Comex unit. That’s the biggest gain for a most-active contract since Feb. 16. The commodity surged 7.6 percent for February, rebounding from an 8.8 percent decline in the previous month.
“We are observing a market that remains strong,” Jose Pablo Arellano, the chief executive officer of Codelco, said yesterday, adding that demand from China remains “firm.” The Santiago-based mining company, owned by the Chilean government, is the world’s largest copper producer.
Japan Factory Output
In Japan, the world’s second-largest economy, factory output rose 2.5 percent last month from December, the 11th straight gain, the Trade Ministry said today in Tokyo. Japan is the world’s fourth-biggest copper user.
“Japanese output is encouraging,” said Max Layton, a Macquarie Bank analyst in London. “We expect copper to go higher in the next two to three months.”
Copper has slipped 1.9 percent this year as China, the biggest consumer, moved to curb record lending and Greece’s budget crisis shook confidence in European assets, causing the euro to slump.
On the London Metal Exchange, copper for three-month delivery rose $196, or 2.8 percent, to $7,195 a metric ton ($3.27 a pound). Zinc, aluminum, tin, lead and nickel rose.
To contact the reporters on the story: Anna Stablum in London at astablum@bloomberg.net; Millie Munshi in New York at mmunshi@bloomberg.net.
