Despite a late bout of profit-taking, copper futures in New York closed at a new high for the year on Tuesday with prospects of stronger demand growth overseas fuelling the buying interest, traders said.
Copper for May delivery ended up 1.25 cents to $3.0340 a lb on the New York Mercantile Exchange's Comex division, after dealing between $3.0050 and $3.0650, its priciest level since December 15.
Traders cited some technical influences at play in futures trade on Tuesday after May copper failed to breach its 200-day moving average at around the $3.07 level, possibly prompting some investors to pocket profits.
"Normally, after a three-day rally or so, you want to start to look to take some money off the table, and that's what we saw today," said Larry Young, senior trader at Infinity Brokerage Services in Chicago.
In one week, the benchmark May contract has rallied over 7 percent amid declining exchange-monitored copper stockpiles and speculation that demand growth, especially from China, will outpace supply.
Chinese imports of refined and anode copper and copper alloy for the first two months of the year hit 321,743 tonnes, up 112.9 percent on the year. "As long as China remains an engine for growth, I suspect that is going to feed into the copper and other precious metal markets as well," said Steve Platt with Archer Financials in Chicago.
Meanwhile, better than expected US housing data underpinned copper's advance as the figures allayed some concerns of further contractions in the down-beaten sector. The pace of US home construction rose 9 percent to an annual pace of 1.525 million units in February compared with a 1.399 million unit pace in January.
This was the sharpest month-over-month increase since a 13.1 percent rise in January 2006. Building permits, which signal future construction plans, fell 2.5 percent to a 1.532 million unit pace. Final estimated copper futures volumes in New York reached 4,500 lots, against 9,890 lots recorded on Monday.
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