US copper futures shied away from a new 11-month high in early trade on Thursday as the market paused following a two-month rally that saw prices climb over 50 percent, traders said.
Copper for May delivery was down 2.25 cents to $3.56 a lb by 10:11 am EDT (1411 GMT) on the New York Mercantile Exchange's COMEX division, falling back from an overnight peak at $3.6245 - its highest level since May 11, 2006, when the contract surged to its all-time high at $3.64.
Futures volumes were estimated at 7,016 lots by 9:00 am. "There could be a growing sense that the recent rally, particularly in copper, is getting somewhat long in the tooth," said Edward Meir, metals analyst with Man Financial, referring to London copper's retreat from a new 7-month high of $7,970 a tonne, reached earlier in the session.
James Quinn, commodity commentator with A.G. Edwards, believed some players could be taking to the sidelines in anticipation of Friday's Commitments of Traders report released by the Commodity Futures Trading Commission. "I think that traders are going to be watching the Commitments data to see if those remaining shorts have actually looked to cover," he said.
In last week's report, the non-commercial short position in US copper futures sank 18.35 percent to 12,891 contracts against a short of 15,790 a week earlier. "But, keep an eye on the energy markets, because the oil is firmer and I think that may underpin the copper on dips," Quinn added.
US crude oil futures rose sharply above $63 on Thursday after the International Energy Agency warned about slumping oil inventories in consumer nations after a large first-quarter 2007 supply drop.
Meanwhile, news that union leaders had blockaded the large Chuquicamata copper mine in northern Chile for most of the day on Wednesday, demanding a meeting with its government owners to discuss what they said were contract violations, did not provide the impetus to extend the recent bullish momentum.
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