Copper Advances in New York Following U.S. Budget AccordJoe Richter and Agnieszka Troszkiewicz
Industrial metals rallied to a three-month high, leading commodities higher, as a U.S. budget agreement that averted higher taxes and spending cuts brightened the outlook for demand.
The House approved a measure skirting income-tax increases for most households in the country, the world’s second-largest metals consumer. President Barack Obama said he would sign the bill into law. Global equities advanced, and lead, aluminum and nickel led gains on the Standard & Poor’s GSCI Spot Index of 24 raw materials. Copper rose the most in more than three months.
“This does help growth prospects, because if the tax increases went into play, it definitely would have taken a huge chunk out of gross domestic product,” Bill O’Neill, a partner at Logic Advisors in Upper Saddle River, New Jersey, said in a telephone interview. “We’re looking for improved demand this year for industrial metals.”
Copper futures for delivery in March increased 2.3 percent to settle at $3.736 a pound at 1:22 p.m. on the Comex in New York, the biggest gain since Sept. 14. China is the largest metals consumer.
On the London Metal Exchange, copper for delivery in three months climbed 3.5 percent to $8,209 a metric ton ($3.72 a pound).
The metal advanced 4.4 percent in 2012 on the LME, the third gain in four years, helped by forecasts for supply to lag demand. Copper inventories tracked by the exchange declined 14 percent in 2012, the third straight contraction.
The LMEX Index, which tracks the six primary metals on the exchange, settled at 3,581.7, the highest since Sept. 14.
Tin surged as much as 4.7 percent today, rising to the highest since February and leading gains among the London exchange’s six main metals. Lead reached $2,439 a ton, the highest since September 2011. Aluminum, zinc and nickel also increased.