Comex copper soars

US copper futures finished with healthy gains on Friday, and traders said concerns about supplies and historically low inventory levels drove prices up, with spot copper hitting a new record high. "There's a lot of fear out there that the market's going to crack. Well, yesterday we saw that they sold the heck out of copper. It opened at the low of the day and started to rally from there," said a New York copper dealer.
"Today (on Friday) you had people buy it right back. Now, the tightness is coming back and the market rallied right in the people's faces, who were getting short and liquidating. As soon as we got down to a level that people liked, it was all bought back again today.
The market is indeed tight," he said. At the New York Mercantile Exchange's Comex division, September futures moved into the benchmark position on Thursday, and ended 2.30 cents higher at $1.5505 per lb., in a range from $1.52 to $1.5570 a lb.
Still-active July contracts rose 1.05 cents to $1.5930 a lb., in a range from $1.5760 to $1.6090 per lb.
Spot June hit a new all-time high on a continuation chart basis at $1.7075. It settled 0.05 higher at $1.6755.
Comex estimated final volume at 27,000 lots, with rollovers accounting for 5,441 of Friday's trades.
Switching out of July copper futures and into September futures continued on Friday, brokers said. With first notice day for July copper coming next on Thursday, about 75 percent of the rolls were completed on Friday's session end.
Adding to already-tight supply concerns was news on Friday that union workers at Placer Dome's Zaldivar copper mine in northern Chile rejected a company offer for a new contract, which could lead to a stick next week.
The company said it would ask labour authorities to mediate contract negotiations as it works to avoid a strike. The mine is slated to produce about 151,000 tonnes of copper this year, mostly in cathode.
In addition, copper inventories on the London Metal Exchange dropped to a new 31-year low on Thursday.
Stocks fell by 575 tonnes to 32,100 tonnes. Comex exchange stocks lost 347 short tons to 15,683 short tons on Wednesday's session. Copper prices also firmed slightly when US new home sales posted a 2.1 percent increase in may, up from a 0.1 percent decline in April.