Copper bounces off 6-year low
Copper futures closed up in London on Thursday, bouncing back from six-year lows as key data out of the US softened the dollar and boosted demand from bargain-hunters in a metal that some now believe is oversold.
The London Metal Exchange's three-month copper contract was up 2.7 per cent at $US5,119 a metric tonne at the PM kerb close, having hit a two-day high during trading at $US5,120 a tonne.
The most actively traded US contract, for September delivery, rose US4.35c, or 1.9 per cent, to settle at $US2.3195 a pound on the Comex division of the New York Mercantile Exchange.
The market interpreted the Federal Open Market Committee meeting minutes for July, released on Wednesday, as suggesting an interest rate rise in September is less certain.
"The minutes of the last FOMC meeting released yesterday evening showed the majority of committee members did not believe US economic conditions were strong enough to support a rise in bench mark interest rates," Liz Grant, at brokers Sucden Financial, said.
An interest rate increase would likely strengthen the dollar, which would put pressure on demand for the red metal as it is priced in dollars. Copper would become more expensive for other currency-holders to buy.
However, copper prices were still hovering just above levels last seen in July 2009, which lured back some investors looking to pick the metal up on the cheap.
"You have some bargain hunters in metals across the board, and copper has been trading pretty low," Bob Haberkorn, a senior commodities broker with RJO Futures in Chicago, said. "People are trying to pick a bottom in copper right here."
Going forward, prices are expected to dip lower on a range of factors.
"With downward pressure on emerging markets, and with sentiment bearish over demand, the rallies are unlikely to last," William Adams, head of research at Fastmarkets, said in a note.
Among the other base metals, aluminum closed up 1.2 per cent at $1,575 a tonne, zinc closed up 1.8 per cent at $1,816 a tonne, nickel closed up 0.4 per cent at $10,405 a tonne, lead closed up 1.5 per cent at $1,716 a tonne and tin closed down 0.7 per cent at $15,250 a tonne.