Copper prices hit ten month high

Copper prices hit ten month high
Written by Florence Bupe and Chiwoyu Sinyangwe
Tuesday, August 04, 2009 3:24:14 PM

COPPER prices on the international market last Friday hit a ten month high to trade at US $5,737 after a significant increase from Thursday’s price of US $5,455 per tonne. According to the Standard Chartered Bank daily newsletter, copper surged to its best level and recorded its biggest monthly gain since March this year.

The price surge was on the back of hopes of increased demand for the commodity by the international business community. Oil prices also posted higher gains to US $66.95 per barrel from the previous US $63.39 on Thursday. The improved commodity prices have raised renewed hopes of global economic recovery.

On the local front, the kwacha has continued to trade above the K5,000 band, closing Friday’s session between K5,080 and K5,100, basically unmoved since last Wednesday.

The day was generally flat with scanty flows, trends that characterised the financial market for most of the week.

Most corporate entities received their tax refunds on Thursday, and market experts predicted there would be little, if any, sale of the US dollar on the market.

The kwacha is this week expected to hold within similar ranges in the absence of any significant flows.

Meanwhile, Vedanta Resources Plc, Konkola Copper Mines’ holding company, has announced that its profits for the first-quarter of this year have fallen by 52 per cent on the backdrop of a decline in international metals prices.

According to the Vedanta Resources Plc’s results, earnings before interest, tax, depreciation and amortisation fell to US $354.7 million in the three months ended June 30, from US $739 million a year earlier.

Vedanta Resources Plc, a London-based company, stated that it beat the US $344.5 million average of 10 analyst estimates compiled by the company.

Vedanta curbed spending by more than US $5 billion and suspended some aluminum operations last year after raw-material demand plunged. Copper, used to make wires and pipes, averaged $4, 780 a metric tonne in the quarter, 43 per cent lower than a year earlier.

On the other hand, Zinc averaged 30 per cent less and aluminium at 49 per cent less.

Quarterly sales dropped 33 per cent to $1.36 billion, Vedanta said.

Production of copper cathode, a finished form of the metal, rose 15 per cent to 78,000 metric tonnes at Vedanta’s Indian and Australian units and copper output at its units increased by 19 per cent to 43,000 tonnes.