BLBG: Copper Advances the Most in Two Weeks on Record-High Holiday Sales in U.S.
Copper rose the most in more than two weeks in New York after record holiday sales in the U.S., the world’s second-biggest consumer of the metal, fueled optimism demand will remain steady.
U.S. retail sales during Thanksgiving weekend increased 16 percent to $52.4 billion, according to the National Retail Federation. Copper also gained as the euro climbed against the dollar after German Finance Minister Wolfgang Schaeuble urged fast-track treaty changes to tighten budget discipline.
“The markets are being driven by good numbers out of the U.S. for Black Friday,” said Nic Brown, head of commodities research at Natixis Commodity Markets Ltd., referring to the day after the Nov. 24 Thanksgiving holiday. “It certainly appears that Europe is getting more serious in its consideration of closer fiscal integration.”
Copper for March delivery climbed 2.6 percent to $3.37 a pound by 7:56 a.m. on the Comex in New York. Prices increased as much as 3.5 percent, the most since Nov. 11. Copper for three- month delivery rose 2.7 percent to $7,423 a metric ton on the London Metal Exchange.
Prices also gained as recent drops drew buyers. The LME Index of the six main metals traded on the exchange last week slid 4 percent, the most in five weeks. LME copper stockpiles dropped 0.5 percent to 392,775 tons, figures showed today.
‘Bargain-Hunting’
“The stronger start to the metals suggests there remain good levels of bargain-hunting demand and continued dip-buying support,” James Moore, an analyst at Fastmarkets.com, wrote in a report today.
The euro climbed as much as 1.2 percent against the dollar, making metals priced in greenbacks cheaper for users of the single European currency. The 30-week correlation coefficient between the euro and copper is now at 0.52, compared with 0.26 on Oct. 5, data compiled by Bloomberg show. A figure of 1 would mean the two move in lockstep.
Metals also gained on speculation the Federal Reserve is poised to begin a third round of asset purchases to stoke the U.S. economy. Another program will start next quarter, 16 of the 21 primary dealers of U.S. government securities that trade with the central bank said in a Bloomberg News survey last week.
Managed-money funds held net-short positions, or wagers on lower prices, of 3,491 Comex copper futures and options as of Nov. 15, compared with 1,767 a week earlier, according to the U.S. Commodity Futures Trading Commission.
Nickel for three-month delivery on the LME advanced 1.8 percent to $17,250 a ton. Posco, the world’s biggest maker of stainless steel, will report record production this year, saying it expects to maintain that pace in 2012 supported by demand from emerging markets. Nickel is used to protect stainless steel against corrosion.
Tin dropped 1.2 percent to $20,450 a ton. PT Koba Tin, the Indonesian unit of Malaysia Smelting Corp., exported 400 tons to Singapore on Nov. 26, the first overseas shipment since September, said a company spokesman.
Aluminum, zinc and lead gained on the LME.
To contact the reporter on this story: Maria Kolesnikova in London at mkolesnikova@bloomberg.net
To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net
