Forexpros – Copper futures rose for a third day on Thursday, trading just below the previous session’s one-week high amid indications demand from top consumer China was strengthening, while a weaker U.S. dollar also lent support.
On the Comex division of the New York Mercantile Exchange, copper futures for March delivery traded at USD3.420 a pound during European morning trade, climbing 0.75%.
It earlier rose by as much as 0.85% to trade at a session high of USD3.424 a pound. Prices rose to a one-week high of USD3.437 a pound on Wednesday.
Trading volumes were expected to remain light ahead of the Christmas holiday weekend, as many traders have closed books before the end of the year, reducing liquidity in the market and increasing the volatility.
Sentiment on the industrial metal was boosted after China’s refined copper imports in November rose to the highest level since June 2009, as lower prices enticed buyers to increase purchases.
According to China’s General Administration of Customs, inbound copper shipments totaled 343,926 metric tons in November, up 16% from 295,341 tons in October and 48% higher than a year earlier.
Meanwhile, a survey from the People’s Bank of China revealed earlier that most of China’s commercial banks anticipated looser monetary policy in the first three months of 2012, a development which would likely support copper demand next year.
China is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.
Copper prices have lost nearly 25% since the start of 2011 as a deepening euro zone debt crisis and fears over a ‘hard landing’ in China pushed investors to liquidate assets such as industrial metals.
Weakness in the U.S. dollar also lent support, as the greenback gave back some of the previous day’s gains in the wake of the European Central Bank’s first offer of unlimited three-year loans, which saw stronger-than-expected demand.
The ECB allotted EUR489 billion to 523 European banks, however the move failed to alleviate concerns over the financial crisis in the region as the scale of the operation indicated that European lenders believe that funding shortages were likely to continue into 2012.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, declined 0.37% to trade at 80.06.
Elsewhere on the Comex, gold for February delivery edged up 0.2% to trade at USD1,616.75 a troy ounce, while silver for March delivery rallied 1% to trade at USD29.54 a troy ounce.
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