FX:Copper futures rebound on Greek debt talk progress
Forexpros - Copper futures regained strength on Tuesday, bouncing off the lowest level in nearly a week as appetite for riskier assets was boosted amid indications of progress in talks between Greece and its bondholders, while supply disruption concerns added further support.
On the Comex division of the New York Mercantile Exchange, copper futures for March delivery traded at USD3.858 a pound during European morning trade, climbing 0.8%.
It earlier rose by as much as 1.1% to trade at a session high USD3.873 a pound. Prices fell to a four-day low of USD3.810 a pound on Monday.
Speaking at a European Union summit in Brussels, Greek Prime Minister Lucas Papademos said "significant progress” was made in talks aimed at restructuring the country’s debt, boosting hopes that a deal can be finalized before the end of the week.
An agreement is necessary for Greece to secure the next tranche of bailout funds in order to prevent a sovereign debt default.
Meanwhile, EU leaders agreed on its fiscal union pact and signed off on the details of a EUR500 billion permanent bailout fund for the euro zone.
Europe as a region is second after China in global demand for the industrial metal. Prices have tracked investor sentiment toward the euro zone’s debt crisis in recent months.
The U.S. dollar weakened against most of its major counterparts, boosting the appeal of dollar-denominated copper futures contracts. The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, was down 0.32% to trade at 78.98.
Prices found further support after workers at Canadian-based Teck Resources’ Quebrada Blanca copper mine in northern Chile went on strike after labor contract talks with the mining company broke down, according to a union leader.
Meanwhile, on the fundamental side, Chile's mining ministry said on Monday that the country's copper output rose 2.2% in December from the same month a year earlier to 509,407 metric tons.
On the year, the country’s copper output declined 3.2% from the previous year to 5.25 million tons. Chile is the world's largest copper producer.
Copper prices are on track to post their biggest monthly gain in three months. Prices have rallied nearly 11.5% in January, buoyed by expectations that demand from top consumer China will remain strong and that the global economy was recovering despite the effects of the euro zone’s debt crisis.
Elsewhere on the Comex, gold for April delivery rose 0.5% to trade at USD1,742.85 a troy ounce, while silver for March delivery added 0.6% to trade at USD33.73 a troy ounce.
