Copper Rises on Speculation August Price Slump Will Spur Demand
By Millie Munshi
Sept. 3 (Bloomberg) -- Copper rose the most in almost two weeks on speculation that a recent price slump will attract buyers anticipating demand from emerging economies.
Continued growth in consuming nations including China will buoy prices for copper, Evy Hambro, who manages the world's largest mining and gold funds at BlackRock Inc., said today. Copper, which touched a seven-month low yesterday, fell 7.5 percent in August as a rebounding dollar curbed investor demand.
``Copper futures rose today after recent price declines spurred buying,'' Alex Heath, the head of base metals trading at RBC Capital Markets in London, said today in a report.
Futures for December delivery added 4 cents, or 1.2 percent, to $3.313 a pound at 12:29 p.m. on the Comex division of the New York Mercantile Exchange. A close at that price would be the biggest jump since Aug. 21.
The metal also climbed after U.S. factory orders increased in July more than forecast. The 1.3 percent rise in bookings followed a revised 2.1 percent increase in June, the Commerce Department said. Economists had forecast a gain of 1 percent, the median estimate of 63 surveyed by Bloomberg News.
Still, the dollar's rise today limited price increases. The U.S. currency climbed as much as 0.9 percent against the euro. Some traders buy copper and other commodities priced in the U.S. currency as a hedge against inflation. The metal yesterday touched $3.159, the lowest since Jan. 28, as the dollar gained.
``If the dollar keeps going up and this deflation idea takes hold, we'll see prices continue to drift lower,'' said Ron Goodis, a futures trading director at Equidex Brokerage Group Inc. in Closter, New Jersey. ``The market is giving off signals that the downside could start to accelerate.''
Ospraie Fund Shuts
Ospraie Management LLC, the New York-based investment firm run by Dwight Anderson, will close its biggest hedge fund after it lost almost 39 percent this year because of declines in commodity stocks.
Losses in the Ospraie Fund, which had $2.8 billion in assets at the beginning of last month, stemmed from a ``substantial sell-off in a number of our energy, mining and resource equity holdings,'' Anderson, 41, wrote in a letter to investors yesterday.
The Morgan Stanley Commodity Related Index of 20 equities has plunged 19 percent since June 30. The Reuters/Jefferies CRB Index has tumbled 21 percent from a record reached on July 3.
Ospraie's losses are a ``sign of the times,'' said Dennis Gartman, the Suffolk, Virginia-based editor of Gartman Letter, who correctly predicted in June that commodities would fall.
``So many people jumped on board the supposed never-ending commodity bull market,'' Gartman said today in Bloomberg Television interview. ``I'm sorry, but, all bull markets come to an end.''
On the London Metal Exchange, copper for delivery in three months rose $90, or 1.2 percent, to $7,350 a metric ton ($3.33 a pound). Before today, the price gained 8.8 percent this year.
iggle piggle eh nigo??
yes know him well, and makka pakka and upsy daisy lol.... yes my little fella cant get enough of them lol...
this is inevitable really, the lower prices will cause marginal operations to close in turn causing a supply shortage and of course cause prices to rise again. has to happen at some stage, and its like everything else if the price falls enough people will start buying again.... ho hum
Keeps the kids occupied while im trying to read the discussions (It works for now)