US copper futures settled lower on Monday as the market paused amid some investor profit-taking following last week's impressive 11.5 percent rally, sources said.
"Given the extent of the rally and how fast this market has gone up in such a short amount of time, this was just what we needed a day of consolidation," said one Comex floor dealer. The benchmark May contract settled 2.95 cents lower at $3.1110 a lb on the New York Mercantile Exchange's Comex division, after trading between $3.08 and a new life-of-contract peak at $3.1825, which was set in overnight electronic trade.
Spot April ended the session down 3.45 cents at $3.2135 a lb. Last on Friday, the contract set an all-time Comex record high at $3.2480. Deferred or back month contracts closed down 2.20 to 2.90 cents on the day.
Comex final copper volume was estimated at 25,000 lots, with 4,860 lots in switches as funds continued to roll out of the May contract into distant months ahead of first notice day for may copper on Friday, April 28.
Since the start of the year, the price of copper in New York has rallied nearly 60 percent amid a constant flow of investment fund money due to global supply concerns, low warehouse stock levels, and robust demand from growing economies such as China and India.
"Going forward, I see copper prices heading consistently higher as emerging economies continue to have a need for this vital industrial metal," said Emanuel Balarie, senior market strategist with Wisdom Financial, Inc.
Additional support was seen from the ongoing labour problems at Grupo Mexico, where some 400 more Mexican miners joined a nation-wide strike in defence of a union boss accused by the government of graft.
The workers at the company's silver, lead and zinc mine in Guerrero state walked out because bosses would not negotiate an annual pay deal with Napoleon Gomez, who the union considers its leader but the government no longer recognises.
Also, more than 300 workers at the Loam's Bays copper mine in northern Chile will vote on Wednesday this week whether to strike or accept a contract offer from Canada's Falconbridge Ltd.
Meanwhile, the Chilean Copper Commission raised its forecast for the average 2006 copper price to a range of $2.60 to $2.64 per lb from its previous forecast of $1.72 to $1.76 a lb.
The latest weekly Commitments of Traders data issued by the Commodity Futures Trading Commission showed the speculative net short position in Comex copper grew to 1,564 lots from 1,428 lots the previous week.
London Metal Exchange three-month copper ended $9 higher at $6,789 a tonne. In electronic trade, copper hit a record high at $6,930. LME copper warehouse stocks fell by 550 tonnes to 117,450 tonnes on Monday, while Comex inventories were down 81 short tons at 17,484 tons on Friday.
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