WSJ: BASE METALS: Copper Up On Improved Greece Outlook, Weak Dollar
NEW YORK (Dow Jones)--Copper futures made slight gains Tuesday as traders were more optimistic that Greece's parliament would approve a plan to deal with the country's debt. A weaker dollar also supported prices for the metal.
Greece's parliament is set to vote on a five-year austerity plan on Wednesday, an action seen as necessary for the country to qualify for further financial aid from other euro-zone members.
Copper traders worry about slower economic activity in Europe affecting demand, though the region isn't as important to prices as China, the world's leader in copper consumption. The metal is used in products ranging from computers to planes, and demand for these goods wanes when the economy slows.
The most actively traded contract, for July delivery, was recently up 2.85 cents, or 0.7%, at $4.0800 a pound on the Comex division of the New York Mercantile Exchange.
Thinly traded June-delivery copper was up 2.75 cents, or 0.68%, at $4.0790 a pound. Today is the contract's last trading day.
Calmer equity markets and a weaker dollar were also supportive of copper, said Sterling Smith, an analyst with Country Hedging.
"The copper market is faring a little bit better this morning," Smith said.
The euro was recently at $1.4327 from $1.4283 late Monday in New York. Copper can appear cheaper for buyers holding foreign currencies when the greenback is weak.
While oil prices have dived over the last weeks amid signs of a U.S. economic slowdown and the release of reserve supplies by major consuming nations, copper's demand outlook remains strong, analysts said.
Copper demand growth has increased from 2% a year to between 4%-5% annually, HSBC Securities analyst Andrew Keen said at a conference in London.
"There are constant debates in the financial community over the price of copper, but it is certainly a market in very strong underlying health," Keen said.
-By Amy D'Onofrio, Dow Jones Newswires; 212-416-3209;