Copper Rises After Report Shows Improved Consumer Confidence
New York, March 26 (Bloomberg) -- Copper rose for the first
time in five sessions after a report showed consumer confidence in
the U.S. increased more than expected in March.
``When people are more confident about the economy, they go
out and buy more things,'' said Tony Nappi, a copper trader at
Triland USA Inc. in New York. ``That's going to benefit copper
prices.''
The Conference Board's gauge of consumer sentiment rose to a
seven-month high, reflecting the economy's rebound from a
recession that curbed industrial demand for wires and pipe. Copper
prices had fallen 4.6 percent from a 10-month high last week on
concern that soaring inventories showed that demand had yet to be
boosted by the recovery.
Copper for May delivery rose as much as 1.05 cents, or 1.4
percent, to 74.8 cents a pound on the Comex division of the New
York Mercantile Exchange. Prices still were 4.7 percent lower than
a year earlier.
In London, copper for delivery in three months rose as much
as $20, or 1.2 percent, to $1,632 a metric ton (74 cents a pound)
on the London Metal Exchange.
The Conference Board's index of consumer confidence rose to
110.2 in March from 95 in February, exceeding analysts' forecasts
for a reading of 98. Consumers' sentiment is an important factor
in economic growth because their spending accounts for about two-
thirds of gross domestic product.
Soaring Inventories
Copper prices had risen as much as 28 percent from a 14-year
low in November as reports showed the U.S. economy was emerging
from recession. The rally stalled because of the continued rise in
London Metal Exchange inventories, which have been at or close to
record levels since late January.
Copper supplies in exchange-monitored warehouses, at 940,850
tons, have more than doubled in the past year and have risen in
all but five of the daily reports issued by the exchange since
late January.
``Inventories do matter, and that's why we'll probably see
copper prices go lower again,'' said Rick Hirsch, president of
Natexis Metals Inc., a trading company in New York.
The rally in copper prices was largely the result of buying
by ``speculators and the commodity funds, not by consumers who
needed the metal,'' Hirsch said.
--Claudia Carpenter in the New York newsroom (212) 318-2346 or at
ccarpenter2@bloomberg.net with reporting by Siobhan Hughes in
Washington. Editor: Bixby |
