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Automobile industry

Copper Prices Surge on Robust Auto Sales and Strong Manufacturing Report

Strategic Insights

— 1 min read

Copper prices jumped on Tuesday, boosted by strong auto sales data from the Detroit big three and a surge in manufacturing activity in the US. The robust auto sales, which showed a double-digit growth in February, have provided a positive indication of copper demand as the metal is widely used in car manufacturing. The strong manufacturing report, which showed manufacturing activity at its highest level in nearly seven years, also contributed to the rise in copper prices.

Key Takeaways:

  • The most actively traded copper contract for May delivery settled up 0.3%, or 1.3 cents, at $4.5095 per pound on the Comex division of the New York Mercantile Exchange.
  • The front-month contract for March delivery was up 0.3%, or 1.25 cents, at $4.4905 a pound.
  • General Motors Co. reported a 46% jump in February car sales, to 207,028 vehicles from 141,951 a year earlier.
  • Ford followed with a 14% increase to 156,626 units, up from 137,664 in January.
  • Chrysler reported a 13% rise to 95,102 units, from 84,449 units in February last year.
  • Economists expected a 0.4% decline in US construction spending, but it fell 0.7% to a seasonally adjusted annual rate of $791.82 billion.
  • The Institute for Supply Management's manufacturing index notched up to 61.4 in February, from 60.8 in January, indicating that manufacturing activity is expanding.
  • Manufacturers use copper wiring and tubing in making everything from washing machines to iPads.
  • Copper traders also followed Federal Reserve Chairman Ben Bernanke's testimony to the US Senate Banking Committee, which kept interest rates low for an extended period and maintained the central bank's liquidity programs in place amid the still-fragile economic recovery.

Statistics:

  • Copper prices settled up 0.3%, or 1.3 cents, at $4.5095 per pound for May delivery.
  • The front-month contract for March delivery was up 0.3%, or 1.25 cents, at $4.4905 a pound.
  • US construction spending fell 0.7% to a seasonally adjusted annual rate of $791.82 billion in January.
  • Economists expected a 0.4% decline in US construction spending.
  • The Institute for Supply Management's manufacturing index notched up to 61.4 in February, from 60.8 in January.

Sources:

  • Dow Jones Commodities News via Comtex
  • Comex division of the New York Mercantile Exchange
  • General Motors Co.
  • Ford
  • Chrysler Group LLC
  • Institute for Supply Management
  • Vision Financial Markets
  • Dow Jones Newswires

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