Building Permits Boost Copper
Source: Bloomberg, Millie Munshi and Anna Stablum (7/20/10)
"Copper prices jumped the most in three weeks."
Permits, a gauge of future construction, rose 2.1% last month to a 586,000 annual pace, the government said today. The gain was the first since March and was more than economists expected. Housing starts fell 5% from the previous month. Builders are the biggest users of copper and use about 400 pounds (181 kilograms) in the average home.
"Copper is getting a bounce from the housing numbers as people are focusing in on the permits part of the report," said Matthew Zeman, a trader at LaSalle Futures Group in Chicago. "The economic outlook is pretty mixed, so any better news is going to help."
Copper futures for September delivery rose 6.35 cents, or 2.2%, to $3.0015 a pound on the Comex in New York. That marked the biggest gain for a most-active contract since June 25. The price has declined 10% this year on concern that the pace of economic growth will slow.
The metal also climbed today as inventories fell for the 23rd straight session, the longest slump in more than a year. Stockpiles monitored by the London Metal Exchange declined 0.8% to 419,600 metric tons today, the lowest level since Nov. 18. Supplies have dropped 16% this year.