US copper futures prices fell more than 3 percent on Monday in a speculative technical sell-off that followed a report showing US factory orders tumbled in January, traders said.
Activity was light for much of the session, but picked up once the selling accelerated in the last hour. Some traders said there was some speculative and some producer selling by participants who think copper may be close to the highs.
"Factory orders weren't very good. But it's hard to know whether the copper traders were looking at that or the overall commodity picture in general. But that type of information has to eventually take its toll," a trader said.
He said a decline in factory orders probably indicates metal that is out there already is not being heavily used. Copper for May delivery ended 6.75 cents lower at $2.1965 a lb on the New York Mercantile Exchange's Comex division.
It had fallen to a three-day low at $2.1860 from $2.2650. Spot March lost 6.85 cents to $2.2010 a lb, after tumbling to a three-day low at $2.20 from $2.2730. The all-time high for spot copper was set at $2.34 a lb set on February 6.
Comex final copper volume was estimated at 12,000 lots on Monday, up from Friday's turnover at 9,770 lots. Despite the selling, some traders said they thought copper, along with other base metals prices, remained range bound, albeit in a very wide trading band.
Even after another day of heavy selling, the trader said, copper would still be commanding a pretty hefty price. "It has a chance of being bought, but it closed beneath some long-term moving averages in London so that may prompt some initial selling," said one copper trader.
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