Comex copper shaves losses

US copper futures prices were pressured by rollover activity, profit taking, dollar strength, and official copper sales in China, but tight supplies inspired buying on dips and left the red metal with only moderate losses by the end, traders said on Tuesday.
"The selling probably has a lot to do with the rollovers. The (metal) markets are just consolidating after a positive week last week. Bears are given a little respite. To them this is a top, but it's just consolidating before it moves higher," said one metals dealer.
The COMEX division of the New York Mercantile Exchange's copper contract for December delivery was down 0.95 cent to close at $1.8380 a lb, after trading as low as $1.8230. The session high was $1.85 with the all-time peak set October 20 at $1.8580.
Spot November fell 0.55 to $1.9320 a lb by the end, and March 2006 copper lost 0.85 to settle at $1.7845. Several later-dated futures set new contract highs.
Activity was light with COMEX estimating final volume at 18,000 lots, a slower pace than the 21,054 tally on Monday. Trade was light and featureless, with many players waiting on the sidelines for clues about future direction.
Some participants continued to anticipate the end of the month, when December becomes the spot contract. A few rollovers transpired in which players sold December copper and rolled their long positions into March contracts, traders said.
Thinly traded sessions make deciphering copper's outlook even more of a guessing game than usual, because many traders are not seeing a trend in the deals that do take place.
Despite the profit-taking selling by copper bears, some traders said they thought red metal prices held up relatively well in light of dollar strength and copper sales in China.
"Relative to what the dollar's been doing, commodities held up pretty well. And copper did trim the losses quite a bit by the end, and there was buying at the lows," a trader said.
The dollar touched a two-year high against the euro, propelled by bullish sentiment that is causing investors with long-term bets against the US currency to capitulate.
In China overnight, dealers said the State Reserve Bureau sold 40,000 tonnes of copper on the Shanghai Futures Exchange. Some participants forecast the SRB might sell around 100,000 tonnes in all to reduce prices.
The SRB is expected to auction 11,000-20,000 tonnes of copper next week, dealers said on Tuesday.
Supplies remain tight and continue to underpin prices. Some players think medium to longer-term fundamentals suggest that copper still has ample room to the up side.
London Metal Exchange warehouse stocks fell by 650 tonnes to 67,025 tonnes on Tuesday. COMEX inventories were unchanged at 3,690 short tons in Monday's daily report.
In London, LME three-months copper slipped to $3,957 a tonne by the end on Tuesday, down from $3,974 a tonne at Monday's close. The range ran from $3,936 to $3,988 a tonne.