Copper advanced for the third straight day, as stockpiles plummeted to a seven-month low. Stockpiles have descended for the thirteenth straight day, a sign of tightening market fundamentals. Adding extra impetus to copper's ascent was a declining greenback.
By Leia Michele Toovey-Exclusive toCopper Investing NewsCopper advanced for the third straight day, as stockpiles plummeted to a seven-month low. Stockpiles have descended for the thirteenth straight day, a sign of tightening market fundamentals. Adding extra impetus to copper's ascent was a declining greenback. Bookings to remove copper from LME warehouses climbed to their highest level in four months. The U.S. Dollar Index, a six-currency gauge of the greenback's strength, fell as much as 0.5 percent. A stronger dollar makes metals priced in the U.S. currency more expensive for holders of other currencies. The U.S. dollar's loss has been positive for the six main metals traded on the LME, with zinc advancing the most. Shortly after opening on Tuesday, LME copper for three-month delivery added 1.6 percent, to hit $6,572 per tonne. Futures for September delivery climbed 2 percent to $2.973 a pound on the COMEX in New York. The recent rally is welcome relief for the battered metal. After declining for three months in a row, copper has already gained 0.9 percent since July's start. According to both analysts and copper producers, dwindling copper supplies will boost the metal's price, in the near future. True, the economic threats, questions about dwindling Chinese demand and euro-zone stability are not over. However, in forecasting copper's future price, Deutsche Bank analyst Daniel Brebner proclaimed “we believe that the market already reflects many of the concerns highlighted.” “While we believe that the copper market still faces some downward pressure, as economic conditions are likely to continue to erode, we expect that considerable buying support could emerge at the $5,500-$6,000 level,” Copper for immediate delivery will average $6,744 a tonne this year, rising to $7,714 next year, according to Brebner. That compares with an average of $7,114 so far this year.