BLBG: Copper Gains for Fifth Day as U.S. Housing Data Drives Optimism
By Glenys Sim
Aug. 5 (Bloomberg) -- Copper advanced for a fifth day, climbing to the highest in 10 months, after better-than- estimated U.S. housing data added to signs the global recession is easing. Zinc and nickel climbed to 11-month highs.
The National Association of Realtors said pending home sales in the U.S. increased for a fifth month, with the number of contracts to buy previously owned homes rising 3.6 percent in June, exceeding the consensus forecast for a 0.7 percent gain. Builders are the biggest users of copper in the U.S., the world’s second-largest consumer.
“It’s a general feeling of optimism across the equities and commodities markets that is driving prices higher,” Yuan Fang, a trader Shanghai East Asia Futures Co., said today. “There’s a lot of money flowing into the markets these days as risk appetite returns with improved economic data.”
Copper for three-month delivery on the London Metal Exchange advanced as much as 1.6 percent to $6,149 a metric ton, the highest price since Oct. 2., before trading at $6,070 at 3:32 p.m. in Singapore.
Copper for September delivery on the Comex division of the New York Mercantile Exchange dropped 1.1 percent at $2.7640 a pound. November-delivery copper on the Shanghai Futures Exchange added as much as 2.5 percent to 48,950 yuan ($7,166) a ton, the highest price since Oct. 6, and closed at 48,000 yuan.
Still, the fundamental picture may not be able to support copper prices at more than $6,000 a ton and a “huge correction” lies ahead, said Yuan. Stockpiles monitored by the London Metal Exchange climbed to 285,900 tons yesterday, nearly double levels a year ago.
Among other LME-traded metals, zinc rose as much as 2 percent to $1,890 a ton, the highest price since Sept. 15, and nickel gained as much as 2.3 percent to $19,799 a ton, the highest price since Sept. 4. Aluminum added 0.8 percent to $2,005 a ton, lead was little changed at $1,922.25 a ton, while tin gained 0.5 percent to $14,825 a ton as of 3:37 p.m. in Singapore.
To contact the reporter on this story: Glenys Sim in Singapore at gsim4@bloomberg.net
