Comex copper ends down

Copper futures in New York ended down over 2 percent on Wednesday, in sympathy with steep declines in the energy and precious metals markets, sources said.
"It was not copper-specific selling today. Everything took a hit today. Oil slid below $58 and gold started to slide, so we just followed suit," said one Comex floor dealer. Copper for December delivery ended the day down 7.70 cents, or 2.3 percent, at $3.2055 a lb on the New York Mercantile Exchange's Comex division, after dealing from a new 10-1/2 week low at $3.1850 to $3.3550.
Dealers now placed new support in December copper at the July 24 low at $3.1450 all the way down to $3.00, while resistance continued to be seen at around $3.50.
Spot October slipped 8.85 cents to its session low at $3.1980, while back month contracts closed down 5.05 to 7.70 cents.
Comex final copper volume was estimated at 21,000 lots, more than the 15,354 lots recorded on Tuesday. Comex copper futures opened with modest gains on some light bargain buying and short covering following the previous session's sharp losses.
But they failed to build on gains and began their descent after weaker-than-expected US economic data reinforced concerns over a slowing economy.
The Institute for Supply Management said its gauge of the services sector, which accounts for about 80 percent of the US economy, slipped in September more than economists had expected.
"Concerns of macro-slowdowns will continue to limit the interest in this market. Until we see a change in the economic outlook, we will likely continue to trade in this recent range and testing new lows if data continues to come in weaker than expected," said one commodity broker.
Bearish weekly crude inventory data pressured oil futures to a fresh seven-month low below $58 a barrel, influencing slipover weakness in the precious and base metals markets. Fundamentally, the copper market continues to derive support from extremely tight inventory levels, potential supply disruptions, and expectations of a demand pickup as it heads into the fourth quarter.
The latest inventory data on Wednesday showed London Metal Exchange warehouse stocks rose 125 tonnes to 116,975 tonnes less than three days worth of global usage. Comex stocks rose 180 short tons to 20,293 tons on Tuesday. The International Copper Study Group forecast that the global copper surplus of 239,000 tonnes should contract to 176,000 tonnes in 2007.
Meanwhile, Chile's Codelco, the world's largest copper producer, set European annual copper premiums at a record $125 a tonne for 2007, up $20 from 2006, and US premiums at 4.50 cents/lb ($100 a tonne) versus 4.25 cents for 2006. LME three-month copper plummeted $310, or 4.2 percent, to settle on Wednesday at $7,030 a tonne.