Comex copper futures finished with substantial gains on Friday, after potential labour problems at the world's largest copper producer, unexpectedly robust US housing data and a weaker dollar triggered buying, traders said.
"We had the story about potential labour problems at (Chilean state-owned Codelco's) Chuquicamata smelter, there was housing starts, the euro took off all of which was helpful," said one dealer.
Some players said those factors combined with market conditions ripe for a buying spree to act as catalysts for copper's dramatic rally.
"I think the fact that people were short copper and it was Friday and it's been in a range for about 8 weeks, we made it down to support levels in a very thin market," one dealer said.
"We ran out of sellers we've had a tremendous drop in open interest and I think those shorts were getting stopped out," the dealer added.
Comex floor brokers also said they saw a lot of new fund buyers' return to the copper market on Friday.
Most-active Comex may copper roared up 5.40 cents to close at $1.3425 per lb. The range extended nearly 7 cents from $1.2785 to $1.3480 a lb.
Next-most-active July futures rose 4.60 cents to $1.3375. The rest settled 2.95 cents to 5.60 cents higher.
Comex estimated final volume at 29,000 lots, a huge increase over the 8,691 lots traded on Thursday.
Open interest rose on Thursday by 2,622 lots to 70,189.
Open interest for Comex copper had fallen sharply for most of the week, with many players exiting stale long positions.
While the trigger for the copper rally may have been the sharp increase in housing data, traders said on Friday's US economic readings just added to a week of healthy data that confirmed the longer-term demand for the red metal would continue.
March US housing starts swelled by more than expected to a 2.007 million rate, a 6.4 percent gain over the revised 1.887 million reported in February and its largest percentage gain since May 2003.
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