US copper futures at the New York Mercantile Exchange's Comex division hit a 2-1/2 week low early Friday as a rebounding dollar triggered another round of profit-taking losses from previous session's highs, traders said.
Active May copper was off 6.65 cents, or 1.7 percent, at $3.8455 a lb by 10:13 am EDT (1413 GMT). Range was $3.81 to $3.9525. On Thursday, May copper hit a contract peak at $4.0495. The dollar pulled further away from a record low against the euro, making dollar-priced metals less attractive to non-US investors.
The stronger dollar gave investors further reason to pocket profits from this week's rally, trader said. Less bleak quarterly results from Citigroup Inc helped push the euro down more than a full cent against the dollar, well away from a record high near $1.60. Overall copper trend is to the upside. A pickup in volatility expected at higher price levels, analyst said.
Tightness in the market expected to lead to further gains, with supply disruptions in Chile in the spotlight. World No 1 copper producer, Codelco, said its Salvador and Andina divisions remained closed due to a strike by subcontractors, now in its third day.
Chile's Codelco had no plans to close its Codelco Norte division, which includes Chuquicamata, or its Teniente and Ventanas divisions. Codelco has annual copper output of about 1.7 million tonnes.
The global copper market in deficit by 7,500 tonnes in January and February, compared with a 42,500 deficit in January to February 2007, World Bureau of Metal Statistics revealed. Output at Japan's top copper smelters in the six months to September expected to fall 1.7 percent from a year ago, partly due to the poorer content of the raw materials used.
A reluctance from China, the world's biggest copper consumer, to chase soaring global prices may undermine the red metal's 2008 rally. Chinese copper production up 19 percent in March from February, National Bureau of Statistics revealed.
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