Copper records biggest single day gain in 18 yrs

Iran tension, record crude prices keep metals on an upswin

Dull supply fuelled copper prices in the domestic as well as international market to an all-time high surpassing all previous projections.

Copper recorded its biggest single day gain in 18 years of 7 per cent in London over speculation about rising demand in China and buying spree from investment funds.

The gains were anticipated but such a high elevation came as a surprise for all active traders throughout the world, said an analyst.

Copper recorded approximately 7 per cent of $425 to $6,635 per tonne gain in the international market after the markets opened after a long weekend.

London Metals Exchange opened after four holidays on Monday which persuaded traders to book fresh with renewed enthusiasm.

Copper recorded a record growth of about 40 per cent since March 1 when prices were ruling at $4,848 per tonne.

In the domestic market, copper wire bar gained Rs 3 to Rs 355 on Tuesday making an overall growth of 30 per cent since the last one and half month.

The gain in the international market percolated to the scrap variety in the domestic market with all metals surged dramatically by Rs 10 i.e. about 4 per cent in just one trading session.

Copper heavy scraps, light scraps, utensil scraps and sheet cutting ended the day at Rs 348 per kg, Rs 338 per kg, Rs 315 per kg and Rs 319 per kg in the Mumbai non-ferrous metals market.

"Inventory is being held by the stockists due to anticipated further price rise. Therefore, the supply has been reducing day by day," Surender Mardia, senior vice president of Bombay Metal Exchange said.

Analysts believe that copper has doubled in the last one year mainly due to China's booming economy which is fuelling demand for raw materials used in cars, homes and consumer appliances.

Chinese economy witnessed a growth of 10 per cent in the first quarter of the current year that surpasses all projections of 9 per cent and even less.

The current increase in copper prices is mainly supported by the inventory decline on supply disruptions from La Caridad, the Mexican mine owned by Grupo Mexico SA, which has halted production since March 24 because of a strike. Grupo Mexico has suspended deliveries to customers for the next month.

LME inventory dropped 350 tonnes on Tuesday to 1,11,300 tonnes, the third straight decline. Inventories have dropped 8.7 per cent this month.