US copper futures inched lower in early morning business Wednesday, failing to hold onto earlier gains as prices dawdled in quiet ranges and bearish players continued to hold sway over direction, brokers said.
"It looks like some shorts from yesterday taking some profits toward the lower end of the range, but it's very quiet. We'll maybe see if we can take another shot at $3.35 (a lb), but other than that, there's not a whole lot going on," said one New York base metals broker.
Copper for July delivery was off 0.75 cent at $3.2950 a lb by 10:16 am EDT (1416 GMT) on the New York Mercantile Exchange's COMEX division, moving between an overnight low of $3.2550 and $3.3325. A failure to surmount gains above the $3.35 level would likely keep the downside pressures alive, traders said, with first support seen at around last week's lows in the $3.23-$3.2285 area.
A break below there would then have the $3.10 level come into play, as it would signal a fifty percent retracement from the February lows at $2.40 to the recent high at $3.8070 in July copper. Spot May copper gained 1.15 cents to $3.32 which was just below its early peak of $3.3210. Estimated copper futures volumes by 9:00 am stood at 4,925 lots.
Another fall in London Metal Exchange copper inventories offered mild support to prices Wednesday, as the near-steady declines continue to signal tight conditions. "For the moment, we continue to favour the upside as ongoing stock draw downs and robust economic growth suggests the market may still tighten up further in the months ahead," said William Adams, metals analyst with BaseMetals.com. LME copper warehouse stocks fell 850 tonnes to 137,575 tonnes on Wednesday, while COMEX stocks decreased 35 short tons to 30,881 short tons on Tuesday.
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