The price of copper tumbled to a six-week low in New York futures trade on Thursday as liquidation pressures mounted in the face of a stronger dollar and global economic growth concerns. Copper for September delivery settled down 8.05 cents or 2.2 percent at $3.5770 per lb on the New York Mercantile Exchange's COMEX division.
Earlier, it bottomed at $3.5550 which marked its lowest level since June 13. Technical support in September contract pegged at its 200-day moving average at around $3.53, and then at $3.50. COMEX estimated volumes at 18,607 lots. Final volumes on Wednesday totalled 20,444 lots. Copper's decline a combination of weaker fundamentals and increased technical selling once prices moved to new lows - David Rinehimer, director of Citi Futures Perspective in New York.
Copper weakens on global economic concerns after German data showed business confidence declined to its lowest level in almost three years. A steeper-than-expected drop in US existing home sales in June adds to the red metal's downside pressures as concerns grow about the impact of the US housing slump on economic growth. The dollar rose to a two-week high against the euro, denting copper's appeal as an alternative investment.
In afternoon trade in New York, the euro was trading down 0.2 percent at $1.5655, well below its record high of $1.6037 set last week. London Metal Exchange (LME) inventories jumped 1,425 tonnes to 130,875 tonnes on Thursday.COMEX copper stocks fell by 156 short tons to 7,167 short tons on Wednesday.
On the earnings front, Teck Cominco said on Wednesday its second-quarter profit rose 2.5 percent, as new copper mines and higher coal prices made up for a 60 percent drop in zinc profits. Australia's Newcrest Mining Ltd said on Thursday copper output was 22,394 tonnes, up slightly on a year ago and up 6 percent on the previous quarter.
The copper market is expected to be in a deficit of 68,000 tonnes this year versus an expected surplus of 160,000 January. LME copper for delivery in three-months ended down $180 at $7,900 a tonne from Wednesday's closing level. Earlier, it hit a 6-week low at $7,887.
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