Copper Rebounds From Three-Month Low in New York as U.S. Equities Rally

Saturday, Mar 12, 2011

Copper rebounded from the lowest price in almost three months as U.S. equities rallied amid optimism that growth will continue.

The Standard & Poor’s 500 Index climbed as much as 0.6 percent as gains in fuel, metal and industrial companies helped the market overcome a global slump following Japan’s worst earthquake on record. Retail sales in the U.S., the world’s largest copper consumer after China, increased in February by the most in four months. The metal, used in homes, cars and appliances, often moves in tandem with the economic outlook.

“Copper got a lift from outside markets,” said Rich Ilczyszyn, a senior strategist at Lind-Waldock, a broker in Chicago. The metal “is definitely a follower today.”

Copper futures for May delivery added 1 cent, or 0.2 percent, to close at $4.2075 a pound at 1:20 p.m. on the Comex in New York. The metal still dropped 6.2 percent this week, the most since early July.

Earlier, the price touched $4.086, the lowest since Dec. 16, as carmakers including Toyota Motor Corp. and Honda Motor Co. shut plants after the temblor in Japan.

“There will likely be a short-term reduction in consumption while power is rationed and the damage is assessed,” Alex Heath, the head of industrial-metals trading at Royal Bank of Canada Europe Ltd. in London said in a report. Over the longer term, “we may actually see a modest increase in consumption in Japan due to the reconstruction that will have to take place.”

On the London Metal Exchange, copper for three-month delivery slid $1 to $9,190 a metric ton ($4.17 a pound). (Source from:Bloomerg)

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