Comex copper jumps

US copper futures ended slightly higher on Tuesday as bargain buying interest moved in following a near 4 percent sell-off on Monday, traders said.
Despite the modest gains on Tuesday, the market's early-year downtrend was still firmly in place, with technical formations beginning to show on the charts which could lead to a test of the recent lows, they added.
"I think we are set up to go lower. We're setting up as a technical M-formation, and it looks pretty negative," said Larry Young, senior trader at Infinity Brokerage Services in Chicago, referring to the market's stalled attempts to break above $2.70 a lb twice in the new year.
Copper for March delivery settled up 1.95 cents at $2.5615 a lb on the New York Mercantile Exchange's COMEX division, near the upper end of its $2.51 to $2.58 trading band.
The next downside target was pegged at the psychological $2.50 level followed by the January 8 low at $2.47. However, if the market were able to hold the lows at $2.47 for a third time this year, prices could begin to develop a base to move higher.
"So with last week's rebound now looking less than robust, the question is whether we are still in base building mode following the early January weakness or whether there is more price weakness on the cards that could see the earlier lows breached," said William Adams, metals analyst with Basemetals.com.
The now spot February contract rose 1.90 cents to close at $2.55, while deferred or back-month contracts ended with gains ranging from 1.85 to 2.20 cents. Final futures volumes were estimated at a modest 6,000 lots, compared with the 16,616 lots recorded on Monday. As of January 29, open interest in Comex copper futures grew 737 lots to 71,841 contracts.
Fundamentally, perceptions of slower US economic growth tied to the slowdown in the housing sector, rising stockpiles of material, receding threats to the market's supply chain, and weaker imports from China continued to keep a lid on any advance.
Comex stocks remained at 36,410 short tons on Monday, while Japanese inventories of copper cathode increased 19.7 percent at 44,106 tonnes by the end of December from a month earlier, preliminary data from the Ministry of Economy, Trade and Industry (METI) showed on Tuesday. LME three-months copper settled up $50 at $5,640 a tonne from Monday's kerb close.