Copper Prices Surge on Rekindled Demand and Smelter Strike Rumors

Strategic Insights -

Copper prices shot up 4 cents to $1.186 a pound on the Commodity Exchange in New York, their steepest one-day gain in over four months, driven by recovering economies in Europe and the United States and a possible Australian smelter strike. The rally lifted the Commodity Research Bureau's index of 21 commodities 1.45 points to 231.17, with coffee, crude oil, and livestock also gaining. Copper's rise was particularly notable, as it marked the highest price in three and a half weeks and the strongest since June 7.

Key Takeaways:

  • Copper prices surged 4 cents to $1.186 a pound on the Commodity Exchange in New York, the steepest one-day gain in over four months.
  • The rally was driven by recovering economies in Europe and the United States, increasing demand for copper.
  • An Australian smelter strike, which would impact about 4% of global copper production, was also cited as a contributing factor.
  • Commodity investment funds sold large holdings in copper futures in the summer, but buying began to pick up as the market retreated.
  • Spot copper prices peaked at a four-year high of $1.285 on September 23, before retreating.
  • Coffee prices rose 6.7 cents to $2.016 a pound, erasing most of Tuesday's losses, due to renewed worries about drought damage to the Brazilian coffee crop.
  • November crude oil rose 20 cents to $17.42 a barrel after an industry group reported lower US stocks of gasoline than traders had expected.
  • Cattle prices led livestock futures sharply higher on the Chicago Mercantile Exchange, driven by expectations of heavy sales to meatpackers clearing up a backlog of market-ready animals.

Statistics:

  • Copper prices surged 4 cents to $1.186 a pound.
  • Commodity Research Bureau's index of 21 commodities rose 1.45 points to 231.17.
  • Spot copper prices peaked at a four-year high of $1.285 on September 23.
  • Coffee prices rose 6.7 cents to $2.016 a pound.
  • November crude oil rose 20 cents to $17.42 a barrel.
  • December live cattle rose 0.90 cent to 69.30 cents a pound.

Sources:

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  • "Copper's surge lifted by talk of Australian smelter strike". – Refco Inc. analyst James Steel.
  • Richard Hirsch, vice president of Sharps Pixley, a brokerage subsidiary of the Deutsche Bank in New York.
  • Commodity Exchange in New York
  • Commodity Research Bureau
  • Coffee, Sugar and Cocoa Exchange in New York
  • New York Mercantile Exchange
  • Chicago Mercantile Exchange