US copper futures tumbled to a ten-month low at the open on Friday as the market extended its new year sell-off amid concerns over rising inventories and waning demand for the industrial metal, traders said.
By 10:22 am EST (1522 GMT), copper for March delivery fell 11.25 cents, or nearly 4.5 percent, to $2.4180 a lb. on the New York Mercantile Exchange's COMEX division, dealing from an overnight peak at $2.5465 down to $2.3910, its lowest level since March 30. Floor dealers said sell-stop orders were triggered below $2.45 and $2.40 a lb., which added to the downside pressure.
"We have been going in this direction for a while ... it seems like the last week, or the last couple of weeks, has been just a rest stop on the way down," said one futures commission merchant in New York. Spot February copper was bid at $2.40, after dropping as much as 13.30 cents to a morning trough at $2.3850. Volume by 10 am was estimated at 2,500 lots.
Looking ahead, market analysts were uncertain on where copper's fair value would be in order to attract commercial interest. "Indeed, in all the metals where supply currently seems adequate, therefore excluding nickel and tin, the market seems in no hurry to restock and, as such, prices may well hold these equilibrium levels until either trade buying returns or investors get interested again," said William Adams, metals analyst with BaseMetals.com.
"As such, it looks as though prices will spend more time base-building and keeping an eye on stocks to see if there are any hints as to what consumers are up to," Adams added. London Metal Exchange copper stocks fell by 850 tonnes to 215,250 tonnes on Friday. Despite the draw, LME inventories were still up nearly 5,000 tonnes for the week.
COMEX stocks rose by 200 short tons to 36,169 short tons on Thursday. Copper inventories monitored by the Shanghai Futures Exchange fell to 23,998 tonnes from 24,071 tonnes the week before.
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