THE LME’s three-month copper contract was up 0.3 per cent at $US6,738.75 a metric ton at Wednesday’s PM kerb close.
Better-than-expected US new homes data for August, which showed an 18 per cent increase with an upward revision for the month of July, “buoyed the Dow and copper,” said Liz Grant at Sucden Financial.
The US is the second-biggest consumer of copper, after China, and the base metal’s price follows the fortunes of the country’s economy closely. The healthier the US economy is, the better copper demand typically is, which tends to push up its price.
Analysts also agreed that the price rise was unlikely to be more than a flash in the pan.
“This is just some bargain-hunting buying consumers, no more than that,” said Robin Bhar, an analyst at Societe Generale.
“I don’t think we’re out of the woods yet in terms of going lower as the (US) dollar strengthens.”
All the other base metals received a boost, too.
Aluminium closed up 0.5 per cent at $US1,975.00, zinc closed 1.2 per cent higher at $US2,281.00 a ton, nickel closed up 1.6 per cent at $US17,400.00, lead closed with a 0.9 per cent gain at $US2,090.00 a ton, and tin closed up 0.5 per cent at $US21,275.00 a ton.