Copper Rises, Heading for Biggest Weekly Gain Since February
By Choy Leng Yeong
Dec. 17 (Bloomberg) -- Copper prices in New York rose for a
seventh straight session, heading for their biggest weekly gain
since February, as a decline in the value of the dollar reduced
the cost of the metal for buyers in Europe and Japan.
The dollar fell against the euro after the Ifo institute said
German business confidence unexpectedly improved. Copper, sold in
dollars, has moved almost in lockstep with the euro's performance
against the dollar in the past two months, at a correlation
coefficient of 0.6. The maximum reading is 1. The coefficient
measures to what degree two variables move in unison.
``The euro definitely had a little bit impact on copper,''
said Peter Ligotti, a trader at William J. O'Reilly Inc. in New
York. ``I've noticed people watching the euro a bit more this
week.''
Copper futures for March delivery rose 0.5 cents, or 0.4
percent, to $1.395 a pound at 12:19 p.m. on the Comex division of
the Nymex. Prices have gained 6 percent in the past seven sessions
and 5.1 percent this week, the biggest weekly gain since the week
ended Feb. 20. A futures contract is an obligation to buy or sell
a commodity at a set price by a specific date.
Copper earlier fell as much as 0.6 percent on concern demand
from China and the U.S., the two largest consumers of the metal,
might slow.
Housing Starts Decline
The metal pared its 1.6 percent intraday gain yesterday to
0.3 percent after a report showing the biggest decline in U.S.
home construction in more than a decade signaled less demand for
the metal used in pipes and electrical wiring in new buildings.
Copper stockpiles in Shanghai Futures Exchange warehouses rose 3.8
percent this week to 39,402 tons from a week earlier, the exchange
said today.
``I don't know if China can continue to grow into the next
year,'' said John Hanemann, president of Hanemann Trading Co. in
New York. ``The fundamentals are very mixed in copper now, and I'm
standing on the sidelines.''
Builders started work on 13 percent fewer homes in November,
a Commerce Department report said yesterday. The average U.S. home
uses about 400 pounds of copper in wiring and pipes.
``The housing starts surprised everyone,'' Hanemann said.
``Nobody has taken into consideration that they haven't started
anything in Florida, which is one of the largest states in
building,'' after hurricane damage in August and September.
Copper reached a 15-year high of $1.482 a pound on Oct. 8,
partly on demand from China and the U.S.
November's U.S. housing starts declined from the best month
of the year in October, when builders kicked into high gear
following the hurricanes in the southeastern U.S.
``I have friends down there,'' Hanemann said. ``You can't get
anybody to put a roof on. Labor cost is so exorbitant.''
--Editors: McKiernan, Enoch |
