MUMBAI: Tight supplies due to constraints on copper mining, a weak dollar and potential exchange-traded fund flows into copper as an asset class have pushed up the prices of the red metal to a 27-month high. While the price spike would inflate costs of power equipment where copper is widely used, it is not likely to benefit copper smelters such as Hindalco Industries and Sterlite Industries , say industry executives and analysts, who added that integrated companies such as Hindustan Copper would gain from the high London Metal Exchange price.
Copper for delivery in three months was up 0.5% to $8,342 a tonne on the London Metal Exchange (LME), as the dollar fell 0.7% on concerns that the US Federal Reserve bond-buying programme would fall short of expectations. “Copper has beaten all predictions and is one of the few commodities to have reached pre-liquidity crisis levels,” said Shakeel Ahmed, chairman of the state-owned Hindustan Copper. The company has scheduled a follow-on public offer in early December where it intends to sell about 20% of its equity capital.
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