Copper Declines as Commodities Slump With Crude-Oil Prices

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Copper Declines as Commodities Slump With Crude-Oil Prices

By Joe Richter – Feb 13, 2013

Copper futures fell for the second time in three days as crude-oil prices slipped, dragging commodities lower.

Oil prices dropped as much as 0.9 percent after a U.S. government report showed crude output jumped to the highest in 20 years. Through yesterday, the dollar gained 0.4 percent against a basket of six currencies this year, reducing the appeal of commodities as alternative investments. The Standard & Poor’s GSCI Spot Index of 24 raw materials, which is weighted by more than 50 percent to energy products, was little changed in New York, erasing earlier gains.

“There’s a little nervousness in the markets over energy prices, and that’s affecting copper,” Sterling Smith, a futures specialist at Citigroup Inc. in Chicago, said in a telephone interview. “The dollar being back in positive territory also isn’t creating an ideal environment. None of this is giving any impetus for buyers to chase the market.”

Copper for delivery in three months decreased 0.1 percent to settle at $8,226 a metric ton ($3.73 a pound) on the London Metal Exchange. Zinc and lead were also lower in London, while aluminum, nickel and tin gained.

Financial markets are closed this week for the Lunar New Year holiday in China, the world’s biggest metals consumer.

“The China holiday has put a major participant in the markets on the sideline,” Smith said.

In New York, copper futures for March delivery declined less than 0.1 percent to close at $3.7425 a pound at 1:13 p.m on the Comex. The price has climbed 2.5 percent this year.

To contact the reporter on this story: Joe Richter in New York at jrichter1@bloomberg.net

To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net

Commodities Set for Longest Run of Weekly Gains Since ’96

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Commodities Set for Longest Run of Weekly Gains Since ’96
By Joe Richter – Feb 1, 2013

Commodities headed for the longest run of weekly gains in 17 years on mounting speculation that the economies in the U.S. and China will rebound, boosting demand for metals, energy and crops.

The Standard & Poor’s GSCI Spot Index of 24 raw materials rose 0.6 percent to 679.72 at 12:41 p.m. New York time. The gauge headed for the eight straight weekly gain, the longest rally since January 1996. Industrial metals and energy led today’s advance.

In January, U.S. hiring increased after accelerating more than estimated at the end 2012, and China’s manufacturing expanded, adding to evidence of economic gains. In 2012, the GSCI extended a rally for the fourth straight year, led by agriculture prices. In the week ended Jan. 22, hedge funds increased bullish commodity bets by the most in six months, the latest government data showed.

“We’re fairly positive on commodities going forward,” Peter Sorrentino, a senior fund manager at Huntington Asset Advisors in Cincinnati who helps oversee $14.7 billion, said in a telephone interview. “Investors are pumping money into the complex once again. Growth expectations for China are starting to ratchet up.”

Eighteen GSCI components rose, and the gauge earlier reached 681.5, the highest since Sept. 17. This week, the index has climbed 2.6 percent, the most since mid-September.

Investors snapped up commodities at the fastest pace in a year. The number of contracts outstanding for the 24 GSCI components jumped 6.2 percent last month, the biggest gain since January 2012.

‘Clearly Positive’

“Improving growth prospects are clearly positive for commodities and will help returns, which should also reinforce flows into the asset class,” Nic Johnson, a money manager who helps oversee about $30 billion in commodities at Pacific Investment Management Co. in Newport Beach,California, said yesterday in an e-mail. He said the rally will continue this year.

Nickel and aluminum prices in London rose today on manufacturing gains in the U.S. and China. Copper traders are the most bullish in 15 months, a Bloomberg survey of traders showed. Gold and silver climbed amid speculation that the Federal Reserve will increase stimulus measure after the jobless rate increased.

“The U.S. will show at least moderate growth going forward this year, and U.S. stimulus should lead to higher commodity prices,” said Daniel Briesemann, a commodity analyst at Commerzbank AG in Frankfurt. “China’s economy is definitely gaining momentum and picking up. It will be the main driver.”

‘Improving Perceptions’

Crude oil gained in New York, heading for the longest stretch of weekly advances in more than eight years, on economic optimism following the U.S. payroll and manufacturing data.

“Prices have primarily moved higher on improving perceptions about the economy,” said Bill O’Grady, the chief market strategist at Confluence Investment Management in St. Louis, which oversees $1.4 billion. “The numbers today show that the economy was a little better than we thought, and that’s mildly supportive for both oil and the products.”

Corn and soybean futures in Chicago gained today on concern that dry weather will reduce output in Argentina. Wheat was little changed, erasing an earlier advance on the persistent drought in the southern U.S. Great Plains. In 2012, the grain climbed 19 percent, the most among GSCI components.

Today, the Dow Jones Industrial Average traded above 14,000 for the first time since 2007 on the jobs data.

To contact the reporter on this story: Joe Richter in New York at jrichter1@bloomberg.net

To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net

Copper Futures Post Biggest Weekly Gain Since September

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Copper Futures Post Biggest Weekly Gain Since September
By Joe Richter and Agnieszka Troszkiewicz – Nov 30, 2012

Copper futures advanced, capping the biggest weekly gain in more than two months, on optimism that demand will increase in China, the world’s top user of industrial metal.

Confidence in China’s economy is at the highest in more than a year amid speculation that Xi Jinping, the new leader, will be better for the financial climate, according to a Bloomberg investor poll. A report tomorrow may disclose that manufacturing increased this month. In the U.S., business activity in November expanded for the first time in three months, MNI Chicago Report’s business barometer showed today.

“The general chatter is that China may be doing better,” Frank McGhee, the head dealer at Integrated Brokerage Services LLC in Chicago, said in a telephone interview. “All of the industrials pick up when the world economy looks better.”

Copper futures for March delivery rose 1.2 percent to settle at $3.65 a pound at 1:21 p.m. on the Comex in New York. Earlier, the price reached $3.6515, the highest for a most- active contract since Oct. 22. This week, the metal gained 3.1 percent, the most since mid-September.

The Chinese Purchasing Managers’ Index probably will increase to 50.8 in November from 50.2, according to the median of 28 estimates compiled by Bloomberg.

Chile’s state-owned Codelco, the world’s largest copper producer, cited “sound and solid” interest from customers for next year. Demand may grow 5 percent to 7 percent in 2013 in China, Chief Executive Officer Thomas Keller said today in Shanghai, citing analyst estimates.

Copper, up 3.8 percent in November, has advanced 6.2 percent this year. Inventory monitored by the London Metal Exchange, down 0.4 percent today, has dropped 33 percent this year.

On the LME, copper for delivery in three months rose 1.2 percent to $7,995 a ton ($3.63 a pound). Aluminum, nickel, zinc and lead gained, while tin dropped.

To contact the reporters on this story: Joe Richter in New York at jrichter1@bloomberg.net; Agnieszka Troszkiewicz in London atatroszkiewic@bloomberg.net

To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net

Copper Advances to Five-Week High on China Growth Optimism

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Copper Advances to Five-Week High on China Growth Optimism

By Agnieszka Troszkiewicz and Joe Richter – Nov 30, 2012

Copper advanced to a five-week high on signs of improving growth prospects in China, the world’s largest user of industrial metals.

Confidence in China’s economy is at the highest in more than a year amid speculation that the new leader Xi Jinping will be better for the financial climate, a Bloomberg investor poll shows. A report tomorrow may show manufacturing increased in the country this month. In the U.S., business activity expanded in November for the first time in three months, the MNI Chicago Report’s business barometer showed today.

“The general chatter is that China may be doing better,” Frank McGhee, the head dealer at Integrated Brokerage Services LLC in Chicago, said in a telephone interview. “All of the industrials pick up when the world economy looks better.”

Copper futures for March delivery rose 0.7 percent to $3.63 a pound at 10:59 a.m. on the Comex in New York, after touching $3.6415 a pound, the highest since Oct. 22.

The Chinese Purchasing Managers’ Index probably will increase to 50.8 in November from 50.2, according to the median of 28 estimates compiled by Bloomberg before tomorrow’s report.

Codelco, the world’s largest copper producer, said today there is “sound and solid” interest from customers for next year. Demand may grow 5 percent to 7 percent next year in China, Codelco Chief Executive Officer Thomas Keller said today in Shanghai, citing analyst estimates.

“Growth appears also to have been re-ignited in Asia and the states,” Michael Turek, a senior director at Newedge Group SA, said by e-mail.

Copper stockpiles monitored by the London Metal Exchange fell 0.4 percent to 248,150 metric tons, exchange data showed today. Inventories are down 33 percent this year.

On the LME, copper for delivery in the months rose 0.8 percent to $7,962.25 a ton ($3.61 a pound)

Aluminum, nickel, zinc and lead also gained in London. Tin was lower.

To contact the reporters on this story: Agnieszka Troszkiewicz in London at atroszkiewic@bloomberg.net; Joe Richter in New York atjrichter1@bloomberg.net

To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net

Copper Rises Most in Two Weeks on China, U.S. Economic Signals

 

Copper Rises Most in Two Weeks on China, U.S. Economic Signals

By Joe Richter and Agnieszka Troszkiewicz – Nov 1, 2012

Copper futures jumped the most in two weeks on signs that economies are stabilizing in China, the top consumer of industrial metals, and the U.S., the second-biggest.

An official Chinese purchasing managers’ index released today rose to 50.2 in October from 49.8 in September, indicating the first expansion in three months. Readings above 50 signal growth. Manufacturing in the U.S. last month expanded more than economists forecast, and construction spending in September climbed to the highest in almost three years. Prices are up 2 percent since reaching a seven-week low on Oct. 29.

“We’re seeing somewhat better economic data, and it looks like the worst may be behind us for the most part,” Frank Cholly, a senior commodity broker at RJO Futures in Chicago, said in a telephone interview.

Copper futures for December delivery climbed 1 percent to settle at $3.552 a pound at 1:15 p.m. on the Comex in New York, the biggest gain for a most-active contract since Oct. 17. Last month, the metal fell 6.4 percent, the most since May.

The metal also climbed after a report showed companies expanded payrolls in the U.S. last month by the most in eight months. The increase of 158,000 followed a revised 114,000 gain in September, ADP Research Institute data showed.

Labor Department figures tomorrow may show employers took on 125,000 workers in October, not enough to keep the jobless rate from rising to 7.9 percent from 7.8 percent, according to the median estimate in a Bloomberg survey of economists.

“The market is focusing on numbers that are better than expected today, but we’ll have to wait for the payroll numbers tomorrow” to see if the gains hold, Adam Klopfenstein, a senior market strategist at Archer Financial Services Inc. in Chicago, said in a telephone interview. “Copper is probably going to be stuck in a trading range until after the election.”

The U.S. presidential election is on Nov. 6.

On the London Metal Exchange, copper for delivery in three months rose 0.9 percent to $7,826 a metric ton ($3.55 a pound). Aluminum, nickel, lead, zinc and tin also advanced.

To contact the reporters on this story: Joe Richter in New York at jrichter1@bloomberg.net; Agnieszka Troszkiewicz in London at atroszkiewic@bloomberg.net

To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net

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