By Leia Michele Toovey- Exclusive to Copper Investing News
Copper held steady early Wednesday, in anticipation of the Fed’s statement, but following the announcement that the U.S. economy is “leveling out,” and the central banks as pledge to keep interest rates low for an “extended period” copper rose to a fresh 2009 high.
Copper for September delivery gained 7.85 cents, or 2.8 per cent, to $2.902 a pound on the New York Mercantile Exchange’s Comex early in trading hours on Thursday. The contract climbed as high as $2.93, the highest intraday price since September 29. The metal for delivery in three months rose 3.2 per cent to $6,386 a metric tonne on the London Metal Exchange.
London-traded copper has jumped 12 per cent so far this month, heading for an eighth straight advance, and has more than doubled in 2009. Price gains for industrial metals sped up in recent weeks, lifting the LME Index of the six metals traded on the exchange by 15 per cent in July. According to ING Groep NV, New York copper will trade in 2010 at an average price of $2.75 a pound ($6,063 a tonne) 28 per cent above its prior forecast of $2.15 ($4,740 a tonne).
On Thursday, Credit Suisse lifted its short and long-term forecasts for copper prices. The broker now has a forecast of $2.90 per pound for 2010 and 2012, and $3.30 per pound for 2011. Long-term, it’s now forecasting $2.00 per pound, up from a previous forecast of $1.50 per pound. “The global outlook has improved in the second half of 2009, especially in China. For copper we see a balanced market across the forecast period implying tighter prices,” the brokerage firm announced.
Company news
Mitsubishi Materials Corp., Japan’s third largest copper smelter, became the first major Japanese company to reverse production cuts issued in the midst of the economic crisis as technical glitches plagues the smelter. Most Japanese smelters have been producing about 10 per cent less copper than their capacity since early this year after the global economic crisis drastically cut demand for the metal. Data shows that the slump in Japan’s domestic demand for copper products is showing signs of easing, although levels remain sharply lower than a year earlier. On Monday, Kenichi Watase, general manager of the firm’s sales department, said it had resumed full production after some technical problems at its facilities had forced it to produce less than it planned at the start of the business year. “We are currently running at full capacity now to catch up,” he said.
Canadian copper and silver producer Anvil Mining Ltd. reported an 87 per cent drop in revenue in the second quarter, due to suspension of operations at some of its mines. For the quarter ended June 30, the company reported net loss of C$11.3 million, or 13 Canadian cents a share, compared with net income of C$8.5 million, or 12 Canadian cents a share, a year ago. Net sales fell to C$7.7 million, from C$59.8 million a year ago. Anvil Mining reported negative cash flow from operating activities of C$6.4 million, or 7 Canadian cents a share, compared with a positive cash flow of C$24.6 million, or 35 Canadian cents a share, a year ago. The company said its results were affected by a number of factors, including suspension of mining and processing operations at the Dikulushi and Mutoshi mines, lower realized copper prices and one-off charges of C$6.1 million.
