US copper futures lost some ground at the open on Tuesday, with follow-through liquidation from last week's price spike continuing to play out before a Federal Reserve interest rate decision later in the day, traders and analysts said.
Larry Young, senior trader at Infinity Futures Inc in Chicago, said a weaker technical backdrop was weighing on prices to start the week.
"We had a sell-signal in the copper at $3.1390 (a lb). So, when that broke, that really pushed the market down because we were building higher last week. But right now the correction has kind of stalled," he said. "I think the sentiment is to the downside. This is technically driven, so we are definitely in a sell-off mode right now, and, depending on what the Fed does, I think we can see it exacerbated further down."
Copper for March delivery was trading down 2.10 cents to $3.0720 a lb by 10:19 am EST (1519 GMT) on the New York Mercantile Exchange's Comex division, moving in a band between $3.0265 and $3.1005. Volume was estimated at 4,262 lots by 9 am.
Expectations for 2008 were at a higher level for the manufacturing sector than the non-manufacturing sector. Meanwhile, import data from China showed imports of unwrought copper and semi-finished copper products unexpectedly climbed 9.5 percent month-on-month in November, rebounding from a 5.6 percent month-on-month fall in October.
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