Copper Gains As Industrial China Grows And US Budget Talks Remain In Focus
Copper gained in thin trading Thursday on the release of data showing that Chinese industrial companies' profits grew 22.8 percent in November from a year earlier. Prices were also boosted by last month's 4.4-percent climb in new home purchases in the US — the highest increase since April 2010.
“You have a recipe for higher copper prices with the home-sales numbers and strong Chinese industrial-profit data,” David Meger, director of metal trading at Chicago's Vision Financial Markets, told Bloomberg.
If the US House of Representatives and President Barack Obama do not reach a deal to avert the automatic tax hikes and spending cuts set to come into effect in January, trading in copper and other metals could remain subdued over the next three trading sessions, Reuters cited RBC as saying in a note. US budget talks are also likely to dictate the direction of metals prices in the coming weeks.On the London Metal Exchange, copper for three-month delivery rose to $7,915 per tonne, up 1.5 percent from Monday's $7,801 closing price. COMEX copper for March delivery was up 0.2 percent, at $3.605 per pound, in late afternoon trading in New York. Company news Xstrata (LSE:XTA) will spend $300 million more than originally planned on developing the Frieda River copper mine in Papua New Guinea. The increase is the result of higher costs for skilled workers and equipment, particularly in remote locations, Reuters reported. Xstrata estimates that the mine will yield an average of 204,000 tonnes of copper per year at a cost of $1.11 per pound. Agence France-Presse also reported that local partner Highlands Pacific (ASX:HIG) said part of the cost increase is related to the depreciation of the US dollar in recent years.
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